Cash and Cash Equivalents important, included, company, point, still

Maddin

Hi Guys,

We tend to combine Cash and Short Term investments as Cash. However, Long term investments are less liquid and are not included in Cash Equivalents.

However, what do you do when you are calculating the Enterprise Value , Market Cap + Debt - Cash. Do we still not include the LT invesments in Cash at that point ? I don't think at that point the liquidity is a prime issue. What is important when calculating the EV is how much "total" cash a company has regardless of its lliquidity status. Is that a correct assumption.

Thanks.