You are on page 1of 4

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 + preferred equity at market value + minority interest at market value, if any + debt at market value + unfunded pension liabilities and other debt-deemed provisions - associate company at market value, if any - cash and cash-equivalents.

EV is more comprehensive than market capitalization (market cap), which only includes common equity.

Financial leverage can be aptly described as the extent to which a business or investor is using the borrowed money. Business companies with high leverage are considered to be at risk of bankruptcy if, in case, they are not able to repay the debts, it might lead to difficulties in getting new lenders in future. It is not that financial leverage is always bad. However, it can lead to an increased shareholders return on investment. Also, very often, there are tax advantages related with borrowing, also known as leverage. Formula The most well known financial leverage ratio is the debt-to-equity ratio (see also debt ratio, equity ratio). It is calculated as: Total debt / Shareholders Equity Calculating financial leverage Financial leverage indicates the reliability of a business on its debts in order to operate. Knowing about the method and technique of calculating financial leverage can help you determine a business financial solvency and its dependency upon its borrowings. The key steps involved in the calculation of Financial Leverage are:

Compute the total debt owed by the company. This counts both short term as well as long term debt, also including commodities like mortgages and money due for services provided. Estimate the total equity held by the shareholders in the company. This requires multiplying the number of outstanding shares by the stock price. The total amount thus obtained represents the shareholder equity.

Divide the total debt by total equity. The quotient thus obtained represents the financial leverage ratio.

Norms and Limits If the financial leverage ratio of a company is higher than 2-to-1, it indicates financial weakness. If the company is leveraged highly, it is considered to be near bankruptcy. Also, it might not be able to secure new capital if it is incapable of meeting its current obligations.

http://www.nepalsharemarket.com/nepalsharemarket/Nepse/Analysis/Quoteanalysis.aspx?id=COM-000001

Nabil Bank Ltd. Kamaladi, Kathmandu Nabil Bank Limited, the first foreign joint venture bank of Nepal, started operations in July 1984. Nabil was incorporated with the objective of extending international standard modern banking services to various sectors of the society. Pursuing its objective, Nabil provides a full range of commercial banking services through its 19 points of representation across the kingdom and over 170 reputed correspondent banks across the globe. Nabil, as a pioneer in introducing many innovative products and marketing concepts in the domestic banking sector, represents a milestone in the banking history of Nepal as it started an era of modern banking with customer satisfaction measured as a focal objective while doing business. Operations of the bank including day-to-day operations and risk management are managed by highly qualified and experienced management team. Bank is fully equipped with modern technology which includes ATMs, credit cards, state-of-art, world-renowned software from Infosys Technologies System, Banglore, India, Internet banking system and Telebanking system.

Nabil Bank Ltd.


Head Office: Kamaladi, Kathmandu Phone NO: 4430425, 4429546-47, 4435380-85 Email: info@nabilbank.com.np http://www.nabilbank.com Post Box No: 3729 Fax: 4429548 Telex: 2385 NABIL NP, 2431 NABILH NP Swift: NARBNPKA Branch Office: Kantipath Phone No: Post Box: Email:

Last Date 27/12/12

Last Sale Rs. 1,701

Net Chg. Rs -8

%Change -0.47

High Rs. 1,695

Low Rs. 1,610

Close Rs. 1,693

Quote NABIL

Listed Shares 20297694

Paid Up Value Rs. 100

Total Paid Up Value Rs. 2,029,769,400

Closing Market Price Rs. 1,693

Market Capitalization Rs. 34,363,995,942

Market Capitalization Date 31/12/12