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Sum-of-the-Parts Calculator

Company value as the sum of its parts — for conglomerates and holdings.

Inputs

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Conglomerate discount

Also called: Holding discount

Where to find it: An empirical value — not a balance-sheet figure.

How to derive: Discount markets apply to conglomerates (typ. 10–20%) because the parts are worth more separately.

Total debt

Also called: Interest-bearing debt, borrowings

Where to find it: Balance sheet: short-term + long-term borrowings (bonds, loans).

How to derive: Add short-term and long-term interest-bearing debt.

Shares outstanding

Also called: Share count

Where to find it: Stock overview page or balance-sheet notes.

How to derive: Market cap ÷ share price (as a rough check).

Share price

Also called: Stock price, market price

Where to find it: Any finance site (Google/Yahoo Finance) — the current trading price per share.

How to derive: Set by the market; just enter the current price per share.

Result — live

Value per share
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Equity value (m)
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Upside vs. price
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Markets usually price conglomerates 10–20% below the sum of parts (the conglomerate discount) — the discount is reality, not an error.

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A conglomerate is a company made of several businesses — say an industrial arm, a software arm and a few stakes. The sum-of-the-parts method values each part on its own, adds them up, subtracts debt and divides by the share count. That shows what the group would be worth broken apart.

How the formula works

Each segment gets its own value (e.g. from a suitable revenue or EBIT multiple). The total is cut by the conglomerate discount, then net debt is subtracted:

Equity value = sum of parts × (1 − discount) − net debt
Value per share = equity value ÷ shares

Example: parts total $8,300m, 15% discount → $7,055m, minus $1,500m debt = $5,555m. Over 200m shares that is $27.78 per share.

How to read the result

Compare the value per share with the price — the upside shows how much substance the market overlooks:

  • Upside above +10% — the parts are worth more than the market pays.
  • −10% to +10% — the discount is already fairly priced in.
  • Below −10% — the group costs more than its parts; the market expects synergies.

The conglomerate discount is normal: mixed groups usually trade 10–20% below the raw sum of parts.

What to watch out for

The method stands or falls with the segment values:

  • Each part needs a fair multiple. Too high a multiple on one division distorts the whole result.
  • The discount is real. Without a catalyst (spin-off, sale) it rarely closes.
  • Don't forget net debt. Pension and lease obligations belong in it.

Frequently asked questions

What is the conglomerate discount?
The discount at which the market values conglomerates below their sum of parts — usually 10–20%. Reasons are opacity, overhead costs and the fear that good capital flows into weak divisions.
When is a SOTP valuation worth it?
For holdings and conglomerates with clearly separable businesses. For a focused single-product company it adds nothing — one valuation model is enough there.
Where do I get the segment values?
From the segment reporting in the annual report, valued with sector-typical multiples. For groups, stakes and net debt, our Fair Value Calculator provides the figures ready-prepared for 35,000+ stocks.

Not financial advice · No buy/sell recommendations · Past performance is not a guarantee of future results.