Tools › Investing › Stock Valuation › Sum-of-the-Parts Valuation › Example

Sum of the parts: four segments, the bridge to equity, value per share and the implied conglomerate discount

ToolSum-of-the-Parts Valuation
SourceU.S. Securities and Exchange Commission (2026). Regulation S-K, Item 101: Description of Business. Code of Federal Regulations, Title 17, Section 229.101.
LevelUndergraduate

Problem

A company reports four segments with EBITDA of 800, 500, 300 and 150 million. Value them at 9 to 11, 11 to 13, 7 to 9 and 14 to 18 times EBITDA, add them to an enterprise value, take off net debt of 3,500 million, minority interests of 400 million and a pension deficit of 300 million, add investments of 600 million, and divide by 400 million shares. State the gap between a share price of 32.00 and the mid value.

Inputs to Enter

  • Segments (EBITDA, low and high multiple): Automation 800, 9 to 11; Aerospace 500, 11 to 13; Buildings 300, 7 to 9; Software 150, 14 to 18
  • Net debt 3,500; adjustments: minority interests −400, pension deficit −300, investments +600 (millions)
  • Shares 400 million; share price 32.00
Open the Sum-of-the-Parts Valuation tool (loaded with this example)

Answers

  • Segment values, low: 7,200 + 5,500 + 2,100 + 2,100 = 16,900; high: 8,800 + 6,500 + 2,700 + 2,700 = 20,700; mid enterprise value (16,900 + 20,700) / 2 = 18,800
  • Implied whole-company multiple, mid: 18,800 / 1,750 = 10.743 (low 9.657, high 11.829)
  • Value of the shares, mid: 18,800 − 3,500 − 100 = 15,200; low 13,300; high 17,100
  • Value per share: low 33.25, mid 15,200 / 400 = 38.00, high 42.75
  • Share of the mid value: Automation 42.6 %, Aerospace 31.9 %, Buildings 12.8 %, Software 12.8 %
  • Price against mid value: (32.00 − 38.00) / 38.00 = −15.79 %, an implied conglomerate discount of 15.79 % on these multiples

Notes

The tool's default inputs are this case; press Submit. The company is illustrative, not a real one, and the multiples are assumptions: the discount is arithmetic on them and says nothing about which number is right. The cited rule is where segment figures in U.S. filings come from; it prints no valuation example. Checked by hand and against an independent numpy implementation (test_sum_of_the_parts.php). A calculator for education and analysis, not investment advice.