Valuation
Sum-of-the-Parts Valuation
Definition
What is Sum-of-the-Parts Valuation?
Valuing separate business segments independently and adding them together, net of central claims.
Example in practice
How This Looks in Practice
A conglomerate's banking, telecom, and propertyLand and buildings held for use, rent, development, or capital appreciation. divisions receive different multiples.
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Related Terms
Valuation
Market Value
The price at which an asset could trade in the market at a given time.
ValuationIntrinsic Value
An estimate of an asset's underlying economic worth based on expected cash flows, assets, or earning power.
ValuationFair Value
An estimate of an asset's appropriate value under specified assumptions or accounting standards.
Capital BudgetingNet Present Value
Present value of expected cash inflows minus present value of expected cash outflows.