Sum-of-the-parts analysis
Method of valuation of a company
Sum of the parts analysis (SOTP), or break-up analysis, is a method of valuation of a multi-divisional company, holding company, or a conglomerate. The essence of the method is to determine what divisions would be worth if the conglomerate is broken up and spun off or acquired by another company; [1] see Conglomerate discount. The analysis calculates a range of values for a conglomerate's equity by summing the value of its individual business segments or divisions to get the total conglomerate's enterprise value. The equity value is then calculated by subtracting net debt and other non-operating adjustments.
References
- ^ "Sum-of-the-Parts Analysis". macabacus.com. Retrieved 2015-04-01.
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Corporate finance and investment banking
- Convertible debt
- Exchangeable debt
- Mezzanine debt
- Pari passu
- Preferred equity
- Second lien debt
- Senior debt
- Senior secured debt
- Shareholder loan
- Stock
- Subordinated debt
- Warrant
(terms/conditions)
- Accretion/dilution analysis
- Adjusted present value
- Associate company
- Business valuation
- Conglomerate discount
- Cost of capital
- Discounted cash flow
- Economic value added
- Enterprise value
- Fairness opinion
- Financial modeling
- Free cash flow
- Market value added
- Minority interest
- Mismarking
- Modigliani–Miller theorem
- Net present value
- Pure play
- Real options
- Residual income
- Stock valuation
- Sum-of-the-parts analysis
- Tax shield
- Terminal value
- Valuation using multiples