KO Equity Value Enterprise Value

8/19/2019 KO Equity Value Enterprise Value

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Equity Value vs. Enterprise Value - Issuing and Repurchasing Shares, and Issui

($ in Million Except Per Share Data)

Equity Value, however, may change depending on the mix o equity v!" de#t v!" ca!h"

t%! &u!t li'e when you #uy a hou!e hou!e i! worth $**+ regardle!! o whether you pa

and * de#t, or anything el!e in #etween- #ut depending on how much ca!h and de

0340 35/SE will #e di6erent" 0he $**+ total value o the hou!e i! li'e the Enterpri!e

0hi! example u!e! 7oca7ola%! 8ling! and 8nancial !tatement! you can 8nd them and

the !ame- #ut it might increa!e or decrea!e #ecau!e o the mar'et !ignal it !end!"

So the!e example! are !trictly rom an 4775/202: per!pective and are de!igned to h

Coca-Cola - Equity Value, Enterprise Value, and Financial Data !hat i" Coca-

7urrent Share Price9 $ ;"B x 00M EV E=

00M P E (Equity Value 2et ncome)9 AC"C x 00M P E (Eq

ey a/ea0ays

Ghen you rai!e de#t or equity or pay o6 de#t or repurcha!e !hare!, Enterpri!e Value

4nd neither do Enterpri!e Value#a!ed multiple!"

ey 1oint o" his 2esson 2o matter how a company i! 8nanced, it! Enterpri!e Value

4! a re!ult, Enterpri!e Value#a!ed valuation multiple! will 34 change even when a c

change! at lea!t, immediately after that change"

http9www"cocacolacompany"cominve!tor!annualotherreport!

http9www"cocacolacompany"cominve!tor!inve!tor!inoquarterly8ling!

34E 0hi! example ignore! atermar'et e6ect!, e"g" i the company i!!ue! !hare! we

http://www.coca-colacompany.com/investors/annual-other-reportshttp://www.coca-colacompany.com/investors/investors-info-quarterly-filingshttp://www.coca-colacompany.com/investors/investors-info-quarterly-filingshttp://www.coca-colacompany.com/investors/annual-other-reports


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Equity Value and Equity Value#a!ed multiple!, however, do change a! a re!ult o the

Ghich i! yet another rea!on why Enterpri!e Value and EV#a!ed multiple! are !o imp

(=oth o them can and do change after that a! the mar'et re!pond! #ut the!e !cena


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ng and Repaying Debt

with all ca!h or * ca!h

t you u!e, your own E./01 2

alue or a company"

ry thi! your!el right here9

lp you an!wer interview que!tion!"

ola Issues #$%,%%% o" Shares& !hat i" It Raises #$%,%%% in Debt&

=y9 $ A*,*** 7a!h 7hange! =y9

=y9 De#t 7hange! =y9

e! =y9 A*,*** Equity 7hange! =y9

# $)%,()* Equity Value

!hEquivalent!9 (?B,*>*) 7a!h @ 7a!hEquivalent!9

e!tment!9 (C,AA) Equity nve!tment!9

9 ;,BB 0otal De#t9

Pen!ion!9 ;,*AA /nunded Pen!ion!9

lling ntere!t!9 >* 2oncontrolling ntere!t!9

alue # $)+,*( Enterprise Value

nue9 ;"C x 00M EV Fevenue9

D49 A>"B x 00M EV E=0D49

ity Value 2et ncome)9 ?A"* x 00M P E (Equity Value 2et ncome)9

oe! 250 change immediately aterward-

!tay! the !ame"

mpany%! 8nancing

a!!ume it! !hare price !tay!


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e 8nancing di6erence!"

rtant (or mo!t indu!trie!-)"

rio! are or interview que!tion!")


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!hat i" It Repurchases #$%,%%% o" Shares& !hat i" It Rep

$ A*,*** 7a!h 7hange! =y9 $ (A*,***) 7a!h 7hange

A*,*** De#t 7hange! =y9 De#t 7hange

Equity 7hange! =y9 (A*,***) Equity 7hang

# $'%,()* Equity Value # $5%,()* Equity Valu

(?B,*>*) 7a!h @ 7a!hEquivalent!9 (B,*>*) 7a!h @ 7a

(C,AA) Equity nve!tment!9 (C,AA) Equity nv

>,BB 0otal De#t9 ;,BB 0otal De#t

;,*AA /nunded Pen!ion!9 ;,*AA /nunded

>* 2oncontrolling ntere!t!9 >* 2oncontro

# $)+,*( Enterprise Value # $)+,*( Enterprise

;"C x 00M EV Fevenue9 ;"C x 00M EV Fev

A>"B x 00M EV E=0D49 A>"B x 00M EV E=

AC"C x 00M P E (Equity Value 2et ncome)9 A"< x 00M P E (Eq


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ays #$%,%%% o" Debt&

=y9 $ (A*,***)

=y9 (A*,***)

e! =y9

# $'%,()*

!hEquivalent!9 (B,*>*)

e!tment!9 (C,AA)

9 ?,BB

Pen!ion!9 ;,*AA

lling ntere!t!9 >*

alue # $)+,*(

nue9 ;"C x

D49 A>"B x

ity Value 2et ncome)9 AC"C x


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KO Equity Value Enterprise Value