medium · Investment Banking implied-share-price
A company has $100 million in Cash on its balance sheet, but $40 million is 'Restricted Cash' pledged as collateral for a long-term construction contract.
How should this be treated in the Enterprise Value bridge?
- Subtract only $60M from EV.
- Add the $40M to Total Debt and subtract $100M from Cash.
- Subtract the full $100M from EV.
- Ignore cash entirely to be conservative.
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