The difference between Enterprise Value and Equity Value is shown by the below formula:
The Enterprise Value to Equity Value Bridge (EV-EQV Bridge), also known as the “net debt bridge”, enables you to make adjustments to the default Net Debt position.
The values for Debt and Cash are based on the data from the last full actual year as specified in the Financial Projections.
Adjusting the Default Net Debt
You have the option to overwrite the default Net Debt position if needed.
The EV-EQV Bridge screen also displays commonly used adjustments to the Net Debt calculation, such as:
Pensions
Non-controlling Interests
Minimum Cash (the portion of cash required for daily operations, which should be excluded from the Net Debt calculation)
Custom Adjustments
In addition to the predefined adjustments, you may need to account for other non-operating assets or liabilities. This can be done by selecting the “Add Custom Positions” option. You can then create custom positions that will be included in the calculation.
Note:
Assets should be entered as a negative value.
Liabilities should be entered as a positive value.
Feedback Confirmation
Once the adjustments are made and included in the calculation, a green feedback prompt will appear, confirming that the custom positions have been successfully added to the valuation calculation.