Model+that+illustrates+bridge+between+equity+value+and+enterprise+value

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One of the most difficult issues in corporate valuation is deciding whether a balance sheet item is implicitly included in enterprise value or whether it should be included in the bridge between enterprise value and equity value.

To model the value implications of various items you should understand the accounting, the cash flow and the tax implications of each item (such as provisions for warranty refunds or the fair value of derivative assets)

This file shows how you can prove how the treatment of various items should work. To do this you have to be able to set up valuation models with flexible time periods, terminal values and discounting.