it's not that incredible. most going concerns already have the working capital, current assets, and receivables to hold out 3-6 months.
and the cost of capital isn't the right rate to be applying here. a better estimate is the spread between the cost of debt and their short-term securities rate (like the interest rate on current assets), which could even be negative (that is, making money). certain businesses can even be financed via their receivables alone.
damodaran is a good reference. his book was the basis of my finance and valuation classes. but it's dense and not easy to implement without going all in. it really taught me that finance and valuation are arguments, not analytical solutions.
and the cost of capital isn't the right rate to be applying here. a better estimate is the spread between the cost of debt and their short-term securities rate (like the interest rate on current assets), which could even be negative (that is, making money). certain businesses can even be financed via their receivables alone.
damodaran is a good reference. his book was the basis of my finance and valuation classes. but it's dense and not easy to implement without going all in. it really taught me that finance and valuation are arguments, not analytical solutions.