Re:Tesla Passes Ford by Market Value
by cynicalkane on Monday April 03, 2017 @03:29PM
(#14026246)
> enterprise value, which is the correct measure of the value of a business
Not even Warren Buffet thinks this. In economics, the correct measure of a value of a business is the future discounted expected value of cash flow and external utility. There's almost no way to measure this directly so major simplifying assumptions are made when applying this definition in practice.
Re:Tesla Passes Ford by Market Value
by kgwgk on Monday April 03, 2017 @06:21PM
(#14027761)
You can use either the cash flows to equity or the cash flows to the firm to calculate the value of equity (ex-non-operating-cash) or the enterprise value.
Not even Warren Buffet thinks this. In economics, the correct measure of a value of a business is the future discounted expected value of cash flow and external utility. There's almost no way to measure this directly so major simplifying assumptions are made when applying this definition in practice.