Does anyone understand why cash and short-term investments are substracted from the EV computation? Thanks 
Analysts use EV to see if you buy the whole company (not only the shares but also the debts) how much will it cost to you. Lets say you want to buy company X and you predicted that its value (both debt and shares) is $10 million. Also assume that company X has $100K as cash. Even if you pay 10 million to buy it, you will end up having 100k in the account so that you actually paid $9.9 million for the company.
Hope my explanation is clear enough.
That should clear your view… Well written wallkahn.
The common analogy is that you buy a wallet for $100, and when you get home you find that the wallet contains a $20 bill. You’re out only $80, so that’s what the wallet cost.
Thank you. Glad if I helped
Thank you guys. I got it
My pleasure.