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EV to Equity Value Bridge

Two analysts can agree on EBITDA, agree on the multiple, and still be a long way apart on the share price, because the bridge is where the disagreements actually live. Walk it one component at a time. Every bar opens to show the inputs underneath it, and the treatment decisions that change the answer are choices you make rather than defaults you inherit.

Pull any listed company, on any exchange, and the bridge fills from its accounts. Covers the pension deficit net of tax, why NCI is added when EBITDA is consolidated, the IFRS 16 versus ASC 842 lease argument, and the treasury stock method.

Equity value
$8.69bn
derived from the bridge
Enterprise value
$12.00bn
you set this
Bridge takes off
27.6%
of EV
Diluted shares
247.3m
basic 240m
Implied price
$35.15
market $38.00

The bridge

Equity Value = EV − Net Debt − Pensions − Preferred − NCI − Leases + JVs · click a bar for its inputs

Enterprise value: $12.00bnEnterprisevalue$12.00bnNet debt: −$2.43bnNetdebt−$2.43bnPensions: −$188mPensions−$188mPreferred equity: −$200mPreferredequity−$200mMinorities (NCI): −$320mMinorities(NCI)−$320mLease liabilities: −$650mLeaseliabilities−$650mJVs and associates: $480mJVs andassociates$480mEquity value: $8.69bnEquityvalue$8.69bn
Enterprise valueClaims ahead of equityValue outside EBITDAEquity value
Which end do you know?

One identity read in two directions. Which end you anchor on is a fact about what you know, not a preference — subtracting a real balance sheet from an enterprise value you invented is how a company with more debt than your assumed value ends up with negative equity.

Try:

Any listed company, on any exchange: AAPL, SHEL.L, 7203.T, SAP.DE. The balance sheet fills from the latest accounts with every line linked to its source, the price comes from the market in the currency the accounts use, and the bridge switches to deriving enterprise value from the two.

Start

Short-term $400m + long-term $3.2bn less usable cash $1.2bn. Restricted cash of $80m is excluded — cash the business needs to trade is not available to repay debt.

From equity value to a share price

Equity value divided by diluted shares, not basic. Options, RSUs and in-the-money convertibles are claims on that value whether or not they have been exercised yet.

Basic shares240.0m
Options (net) + RSUs+7.3m
Convertibles— (in debt)
Diluted shares247.3m
Implied share price$35.15
Implied $35.15 versus a market price of $38.00 — -7% downside. Before calling that a view, check the bridge: a difference this size is as often a treatment disagreement as a valuation one.

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The enterprise value at the top of this bridge has to come from somewhere. Build the discount rate behind it in the WACC Builder.Open it

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