medium · Investment Banking implied-share-price
How is Restricted Cash typically handled in an Enterprise Value calculation?
- It is disregarded entirely in both the Equity Value and Enterprise Value bridge calculations.
- It is subtracted from the debt balance in exactly the same manner as any other unrestricted cash balance is treated.
- It is added onto the total debt balance because restricted cash is effectively treated as a liability of the company.
- It is not subtracted from Equity Value because it is not readily available to offset the acquisition cost.
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