Causes for loss of public enterprise
What is enterprise ?
The term “enterprise” has two common meanings:
Firstly, an enterprise is simply another name for a business. we often come across this word when reading about start-ups and other businesses…“Simon Cowell’s enterprise” or “Michelle set up her successful enterprise after leaving teaching” etc. Secondly, and perhaps more importantly, the word enterprise describes the actions of someone who shows some initiative by taking a risk by setting up, investing in and running a business. The two key words above are initiative and risk.
A person who takes the initiative is someone who “makes things happen”. He or she tends to be decisive. A business opportunity is identified and the person does something about it. Showing initiative is about taking decisions . Risk-taking is slightly different. In business there is no such thing as a “sure fire bet”. All business investments carry an element of risk – which is the chance or probability that things will go wrong. At the worst, the risk of an enterprise might mean the person making the investment loses all his/her money or becomes personally liable for the debts of the business. The trick is to take calculated risks, and to ensure that the likely returns from taking a risk are enough to make the gamble worthwhile. Someone who shows enterprise is an “entrepreneur”.
Terms related to enterprise:
Enterprise value [EV]
A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. Enterprise value =
common equity at market value (this line item is also known as "market cap") + preferred equity at market value
+ minority interest at market value, if any
+ debt at market value (here debt refers to interest-bearing liabilities, both long-term and short-term) + unfunded pension liabilities and other debt-deemed provisions - investments in associated companies at market value, if any - "extra assets", assets not required to run the business
- cash and cash equivalents
Enterprise Value Tax
Enterprise Value Tax refers to a proposed change in the United States tax treatment of gains in connection with the sale of a business that is structured as a partnership for tax purposes and which earns so-called “carried interest” in the course of its business. The Enterprise Value Tax is contained in various iterations of proposed legislation to change the tax treatment of carried interest The tax would be primarily targeted at investment management partnerships, including private equity, venture capital, real estate and hedge fund managers; it might subject owners of these businesses to disparate tax treatment compared to the owners of other businesses.
A ratio used to determine the value of a company. The enterprise multiple looks at a firm as a potential acquirer would, because it takes debt into account - an item which other multiples like the P/E ratio do not include. Enterprise multiple is calculated as:
Also known as the EBITDA Multiple.
EBITDA stands for earnings before interest, taxes, depreciation and amortization. It is an accounting convention designed to arrive at an earnings figure that presents results on an operating basis. Basically, it encompasses revenue minus wages, utilities and other expenses needed for day-to-day operations. Companies with high capital expenses, such as telecommunications firms, use EBITDA to best measure financial results. So, if company spends $100 million on new vehicles, that cost would not be included in the profit/loss calculation using EBITDA.
An economic system, where few restrictions are placed on business activities and ownership. In this system, governments generally have minimal ownership of enterprises in the market place. This...
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