Saturday, October 5, 2013

Enterprise Value Finance Analysis

Enterprise Value Finance Analysis


Enterprise Value Finance Analysis

Analysis for Financial Management (Mcgraw-Hill/Irwin Series in Finance, Insurance, and Real Estate) [Paperback]

Enterprise Value Finance Analysis
I expected this book to be very dry and to the point, focusing on the nuts and bolts of finance and little else. I was surprised once I started reading that it was actually written well, and with a sense of humor. Sure, some of it is the nerdy accountant joke type stuff, but there are also some witty and sarcastic quips too - it makes you feel like a real, normal person wrote the text rather than some robot professor.

That said, it also offers a comprehensive - if somewhat shallow - overview of financial management and analytic techniques. You'll learn about financial statements, forecasting, financing instruments, and evaluation of projects and firms. I think it is very helpful to read this if you have an interest in business, but not a strong background - definitely good for any future managers. It won't give you a super in depth view of everything a CFO might need to know and if you're really into corporate finance you'll likely have to look elsewhere pretty soon. Financial Management: Theory & Practice is a more in-depth option for those interested, though it doesn't have the same casual element.  

Enterprise Value Finance Analysis

Tuesday, May 7, 2013

Enterprise Value Finance

Enterprise Value Finance






Investopedia explains 'Enterprise Multiple'
A low ratio indicates that a company might be undervalued. The enterprise multiple is used for several reasons:

Enterprise Value Finance

1) It's useful for transnational comparisons because it ignores the distorting effects of individual countries' taxation policies.

Enterprise Value Finance

2) It's used to find attractive takeover candidates. Enterprise value is a better metric than market cap for takeovers. It takes into account the debt which the acquirer will have to assume. Therefore, a company with a low enterprise multiple can be viewed as a good takeover candidate.
Enterprise Value Finance
Keep in mind that enterprise multiples can vary depending on the industry. Therefore, it's important to compare the multiple to other companies or to the industry in general. Expect higher enterprise multiples in high growth industries (like biotech) and lower multiples in industries with slow growth (like railways).
Enterprise Value Finance