Forum Archive Index - February 2001

[Nigel McCarter <n.mccarter@clear.net.nz>]

>...
>"Computing a company's enterprise value is easy.
>
>Take the stock's market capitalization (which is the stock price
>multiplied by the number of shares outstanding), add long-term debt,
>and then subtract the value of assets peripheral to the core
>businesses (that is, cash). To compute a per-share number, divide
>the enterprise value by the number of outstanding common shares"
> >

the interesting thing is that when I do this for New Zealand companies, 
must of the price ratios are close to one.
I'm not sure that I'm right
Maybe we need a few worked examples:

eg.

Ebos
current share price = $3.20
Issue shares 26,821,628
Market Capitlisation $85.83 Million

After Tax profit  $4,238, 000
Therefore PE ratio = 20.3

Shareholders equity = 35,476,000
Cash =$68,674
Non current liabilities = 3,117,000

Therefore Enterprise value = $88,878,000

EV per share= $ 3.31
price per EV =  1.0

Humm
what sayest thou


Nigel





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