Sum of the parts
Programmes, corporate costs, net cash, per share.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: sum of the parts.Updated 30 September 2026
What it does
The company as the sum of its programmes. Each rNPV is added; the present value of the unallocated corporate costs, which are paid whatever the pipeline does, is subtracted; net cash is added; the result is divided by the diluted share count and set against the price. A discount-rate sensitivity re-prices the whole company in live formulas, and a line says how much of the value is probability.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 9–16: Discount rate, Tax rate once profitable, Diluted shares (millions), Cash and investments…
- SOTP, rows 6–9: Year, Unallocated corporate costs, Present value, Total risk-adjusted cash flow, all programmes less corporate costs
- SOTP, rows 12–22: Programme A rNPV, Programme B rNPV, Programme C rNPV, Corporate costs, present value…
- SOTP, rows 25–28: Step, Discount rate, Equity value per share, Check: the centre of the sensitivity is the value per share
What a reviewer looks for
- Corporate costs left out.
- Cash added without the debt subtracted.
- Basic shares where warrants and options are outstanding.
Learn it, then build it
Vocabulary: Sum-of-the-Parts (SOTP), Net Debt.