Seasonality Adjustment to Enterprise Value

Working CapitalValuationSeasonality
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6 years ago
#1
Ryan Shoemaker A+ 2
RS
Seasonality Adjustment to Enterprise Value

Has anyone amended the Enterprise / Equity Value modules to allow for adjustment from ending working capital to average working capital? 

6 years ago
Michael Hutchens A+ 189

Hi Ryan,

Can you please provide more information about what it is that you're trying to do.

Are you wanting to normalize the final period cash flow for terminal value purposes?

I'm a little confused, because if you're using an EBITDA multiple as the basis for your terminal value than adjusting working capital will have no impact, as it will impact cash but not earnings...