First is there was nonsensical trading at the opening this morning. Secondly, do not believe you can compare CBR to CBAI for buyout value. CBR was a private company , no shares, and no balance sheet available , so the real value is not known to the general public to analyze. The amount applied to sales is a result of the buyout cost based on CBR'S valuation. CBAI has to increase sales, and strengthen their balance sheet more to be worth .02 IMO. I believe they will as time goes on. The way I understand using the definition of EV, a buyout price for CBAI (based on current info see below a/o 9/2/2015) would be closer to .0514 (5,140,000/ 1,300,000,000 + 30% premium), based on the following using NO.1. Using NO.2 The value would be approx. the same. I am sure other factors come into play, but do not think it would make a significant impact. Just an opinion ,have to be realistic, unless my math is wrong.
1 )Enterprise value(EV) can be thought of as the theoretical takeover price if the company were to bought. In the event of such a buyout, an acquirer would generally have to take on the company's debt, but would pocket its cash for itself. EV differs significantly from simple market capitalization in several ways, and many consider it to be a more accurate representation of a firms value.
The enterprise value (EV) measures the value of the ongoing operations of a company. It attempts to measure the value of a company's business instead of measuring the value of the company. It is the measure for calculating how much it would cost to buy a company’s business free of its debts and liabilities. It can be thought of as a theoretical takeover price of a company’s business.
The enterprise value is used as an alternative to market capitalization. It is a more accurate estimate of the takeover price of a company than the market capitalization.
The value of a firms debt, for example, would need to be paid by the buyer when taking over a company, thus enterprise value provides a much more accurate takeover valuation because it includes debt in its value calculation.
2)Another commonly used multiple for determining the relative value of firms is the enterprise value to sales ratio, or EV/Sales. EV/sales is regarded as a more accurate measure than the Price/Sales ratio since it takes into account the value and amount of debt a company has, which needs to be paid back at some point. Generally the lower the EV/sales multiple the more attractive or undervalued the company is believed to be. The EV/sales ratio can actually be negative at times when the cash held by a company is more than the market capitalization and debt value, implying that the company can essentially be buy itself with its own cash.
Data provided by Capital IQ, except where noted.
Valuation Measures
Market Cap (intraday)(5 see below): 4.32M
Enterprise Value (Sep 2, 2015)(3 see below): 5.14M
Enterprise Value/Revenue (ttm)(3 see below): 1.01 .
(3) Data derived from multiple sources or calculated by Yahoo! Finance
(5) Shares outstanding is taken from the most recently filed quarterly or annual report and Market Cap is calculated using shares outstanding.
