easy · Investment Banking implied-share-price
When bridging from Equity Value to Enterprise Value, how should the company's Cash and Cash Equivalents be treated?
- They should be subtracted because cash is a non-operating asset that offsets the cost of an acquisition.
- They should be added back only if the company reports negative net working capital on its books
- They should be ignored since cash is already fully reflected in the company's market capitalization
- They should be added because holding cash increases the total asset base reported on the company's balance sheet
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