Valuation methods & enterprise value · Core

Sum-of-the-parts

Also called: SOTP

ELI5

Valuation of separate businesses or assets individually, then combined with adjustments.

Used in conversation

“Compare sum-of-the-parts with the same cohort and period before drawing a conclusion.”

Pitch context

You will see “Sum-of-the-parts” in financial models, budgets, board packs and investor materials when the discussion reaches valuation methods & enterprise value.

Why it matters: In valuation methods & enterprise value, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Sources & evidence · 5

Direct term-level sources and supporting source families.