Quizzes & Puzzles8 mins ago
Valuation "riddle"
4 Answers
So all other things being equal.
Is a company with $20MM in cash on the balance sheet worth the same as one with $5MM in cash on the balance sheet?
Why?
Is a company with $20MM in cash on the balance sheet worth the same as one with $5MM in cash on the balance sheet?
Why?
Answers
Best Answer
No best answer has yet been selected by upperechelon. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.But that doesn't mean it is necessarily valued as 15MM more. Enterprise value would suggest it is valued as 15MM less.
The rate of return on the one with 15MM more would also be less, as they have a less efficient use of their cash in generating revenue if all else is the same.
It's a riddle test my boss gave us analysts and all of us have come up short thus far.
How would the two companies compare in acquisition prices therefore?
The rate of return on the one with 15MM more would also be less, as they have a less efficient use of their cash in generating revenue if all else is the same.
It's a riddle test my boss gave us analysts and all of us have come up short thus far.
How would the two companies compare in acquisition prices therefore?
Related Questions
Sorry, we can't find any related questions. Try using the search bar at the top of the page to search for some keywords, or choose a topic and submit your own question.