YEEHAW CANDIDATES Message Board

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Strategies & Market Trends : YEEHAW CANDIDATES

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To: Ken W who wrote (3383)	10/17/2003 2:17:14 PM
From: Sergio H	Read Replies (2) of 23958

If you want to own the company, you have to buy all of the outstanding shares (market value) and pay off the debt. When you own the company, the cash is yours so you subtract that from the cost. Since debt increases and cash decreases the enterprise value, its important not to take enterprise value as a raw number. Divide earnings before any adjustments by the EV to get a more realistic picture. This ratio = how expensive the earnings are relative to liquidation value of the stock at current market price. By comparing E/EV for the respective stock in comparison to other stocks in the peer group you get a value gauge.

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