[C2.] Auditors Revise Parmalat Debt PricewaterhouseCoopers, the new auditor of Parmalat, found that the company's net debt minus liquid assets was 14.3 billion euros, or $18 billion, at the end of September, far more than the 1.8 billion euros reported earlier.
The accepted and widely used figure for debt is actually the net debt of the UK; in other words, the total debt minus the government's liquid assets.
After that, borrowers still hold a debt consisting in the outstanding mortgage debt minus the auction prize of the dwelling plus the interests for late payment, which are generally quite high.
It includes a one-to-one stock swap worth $1.1 billion, with International Game assuming $430 million in Anchor debt, minus the value of assets.
Specifically, it calculates a company's enterprise value -- the market value of its equity plus total debt, minus cash and short-term investments -- and divides it by the company's after-tax net operating profits.
To value companies, Mr. Hathaway compares enterprise value -- market capitalization plus debt, minus cash -- to net present value, or the total value of reserves minus the cost of production in today's dollars.
An independent auditor later found that Parmalat had been doctoring its accounts for more than a decade and that the company had net debt - debt minus liquid assets - of 14.3 billion euros ($17.2 billion).
Viren Mehta, a partner at Mehta Partners, a biopharmaceutical investment research firm in New York, calculated that debt minus cash and its equivalents of a combined Hoechst with Rhone-Poulenc would total 75percentt of its market value.
Over the same time, the study found, one measure of corporate debt — the net debt ratio, or debt minus cash as a percent of total assets — fell so sharply that, by 2004, it was below zero, where it stayed at least through 2006.
Enterprise value measures market value plus debt minus cash.
Halliburton's enterprise value (market value of common, plus debt, minus cash on hand) is $30 billion.
