Sum-of-the-parts analysis
Method of valuation of a company
None
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 .