Sum of the parts
Value a group one business at a time, then reassemble it.
A group that owns an industrial business, a software business and a logistics business is three companies wearing one share price. A single blended multiple prices all three as though they grew at the same rate and carried the same risk, which none of them do. Sum of the parts values each segment against its own peers, adds the stakes and assets that sit outside the operating businesses, subtracts every claim that ranks ahead of the shareholder, and arrives at a value per share that can be compared with the market. Where the two differ, you have located a conglomerate discount, and the size of it is the entire case for a break-up.
What this course covers
- 01Define the segments you can actually value
- 02Choose a metric and a peer set for each
- 03Deal with the head office
- 04Add what sits outside the operating businesses
- 05Bridge to equity, then compare
What you will be able to do
- A diversified group whose segments would trade on very different multiples
- Testing whether a break-up, spin-off or divestment would release value
- A holding company whose main assets are stakes in other listed businesses
- Defending against, or building, an activist campaign
Where it does not apply
- A single-business company, where it adds arithmetic and no insight
- A group whose segments are genuinely integrated and cannot be sold separately
- Any situation where segment disclosure is too thin to support a multiple; a value built on a management allocation you cannot check is a guess with decimal places
How this prepares you for the assessment
This is one of 17 courses, and none of them is required for the Verified Valuation Assessment. The credential is earned on two timed drills, graded by the same engine that checks this course, and the drill score decides what it says you are capable of, from Foundation through to Distinction.
- Distinction90%+Works independently across all three core methods.
- Merit75%+Builds the core models with limited supervision.
- Pass60%+Understands the mechanics; works through a model with guidance.
- FoundationcompletedKnows the vocabulary and the shape of each model.