Bridge enterprise value to equity value
Build an enterprise-value-to-equity-value bridge with defensible net debt classifications.
Enterprise value is USD 140.0 million. The balance sheet includes USD 9.0 million bank debt, USD 3.1 million free cash, USD 800k restricted cash, USD 2.2 million sale bonuses, and USD 1.4 million overdue payroll taxes. Enterprise value - debt-like obligations + cash-like assets +/- agreement-specific items = equity value The common trap is treating net debt as only bank debt and cash as every bank balance, while missing sale-triggered liabilities and restricted cash. Start with enterprise value Use USD 140.0 million from the LOI. Enterprise value prices the business before financing and cash adjustments. Subtract financial debt Subtract USD…
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