Hi Camden55 I have only just discovered your posts, and I must...

Hi Camden55 I have only just discovered your posts, and I must say I am impressed with your level of analysis, the way you look at a company's balance sheet resonates with me.

I have a quick question, I must apologize in advance as this post is not relevant to MCP, but more of an analysis question in general.

When calculating a companys EV, do you take into account current liabilities or just non current liabilities? A case in point is VMG.

For 2010:
Cash and cash equivalents: $19.259m

Current Liabilities:
Interest bearing loans and borrowings: $15.772m
Provisions: $14m

Non-current:
Interest bearing: $21m
Deferred Tax: $12m

FCF: $31.8m

Total shares on issue: 214m

Current share price: 47c

So Market Cap: $100million
EV= MC - Cash + (long term borrowing + current borrowings???)

Also would you take into account other forms of debt when calculating the EV, like that deferred tax or provisions?. I like the idea of understanding the total outlay for buying the company in question, and then calculating the payback period using free cash flow.

I would greatly appreciate your input on this matter, if you do have the time to reply maybe we should move the thread across to VMG. I only chose that company because I felt it had an interesting balance sheet for the exercise.

cheers and sorry once again for hijacking this thread.

ciao