课程: Excel for Banking Professionals

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Sum of parts modeling in Excel

Sum of parts modeling in Excel

- [Instructor] Another very common type of valuation exercise you'll often run into is what's referred to as a sum-of-the-parts valuation. Under a sum-of-the-parts valuation, we're going through and evaluating the value of different components in a larger corporation. Let's take a look at an example. I'm in the 03,04_Begin Excel file. Now we're going through and doing a sum of the parts valuation for Tesla and three different divisions here using fictional numbers, cars, batteries, and solar. So the overall Tesla firm has 17.6 billion in free cash flow, and that's what we see over here for year zero in our sum of the parts total. So it looks like our initial formulas are correct, and that's 100% of their initial year zero total. Now, the idea or theory might be by breaking the firm up, we might have different components grow faster, because maybe there's a little bit more focus, or there's more synergies between different…

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