Why Does The Equity Value Come Out Greater Than The Enterprise Value?
Adding the intangibles does not increase the asset sale value in that this is what we are trying to estimate. The only time you will see intangibles like goodwill is if the current owner purchased the business as an asset purchase (in a stock purchase, no goodwill is recognized).
Some companies (very few) may have patents, but their "value" is captured in the earnings-driven estimate of asset sale value - and then equity value after adjustments for liquid financial assets and liabilities. When the user indicates the presence of intellectual property in the questionnaire, this will also impact value.
So - the goodwill value of a company is inherent in and captured by our asset sale and equity value estimates by way of the earnings that they are linked to.
Companies that are valued over and above their identifiable tangible assets (inventory and fixed assets) will by definition have "goodwill value" (which in turn could be broken down into trade name, client base, phone number, covenant not to compete, etc.).
When goodwill is on a given firm’s balance sheet, this means only that they bought the business through an asset deal/purchase and buyer and seller agreed to the "allocation of purchase price" to tangible and intangible asset categories. This allocation does not occur when a buyer purchases the stock or equity.