BelalM

^^^ Yup, you are right. I realized that after I wrote the behemoth original post. So watch out for:

Land Held for Investment
Investments
Excess Cash
Pension Fund Surplus

I think the only way this will come up is if they sneak a line item onto the BS that says "Non-Operating Assets" --- then you know, after you are done using FCFF or FCFE to value the firm, you have to add these non-operating assets to get the TOTAL value of the firm.

Intuitively it makes sense -- FCFF and FCFE are valuing the firm based on assets that produce cash flows (operating assets). So add back non-operating assets for total value.



Edited 1 time(s). Last edit at Thursday, June 2, 2011 at 03:05PM by tiredofstudying.