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What is the Net-Debt Bridge?
What is the Net-Debt Bridge?

Net-debt, EV-EqV bridge, custom debt positions, financial considerations, other data

Updated over a week ago

The EV-EQV Bridge, also called the Net-Debt bridge, helps transition between Enterprise and Equity Value (and vice versa), by subtracting and/ or adding certain positions.
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To get from the Enterprise Value to the Equity Value, you have to subtract the long-term liabilities (debt, pensions,..) and add non-operational liquidity (excess cash,...).

The input can be found in the Business Plan section, under EV-EQV Bridge.

By default, the Net Debt bridge shows the last full "Actual" year data. I.e. a valuation in 2021 would show the Net Debt data for 2020.

Also by default, it will take your Cash and Debt positions from your Financial Projections, regardless of whether you choose to upload an Excel file or use the Peer Estimates. However, you can overwrite these positions, for example when you have intra-year financials such as half-year or quarterly financial statements.

The main benefit is that you can quickly personalize your valuation, adding key considerations at speed. By clicking on “add custom positions”, you can create your own positions in the Net-Debt Bridge, and class them as positive or negative. Once completed, a green feedback prompt will show it has been added and considered within your valuation calculation.

Custom positions could include:

  • Investments

  • Pension

  • Minority interests

  • Preference shares

  • “Other” assets and liabilities

The best practice is to include any interest-bearing liabilities as part of the debt.

The Ev-Eqv Bridge will appear as follows in the Final Valuation -

Here is your video for your reference -

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