In bridging from enterprise to equity value, net debt is considered alongside non-controlling interests, debt-like items (such as severance pay provisions and tax liabilities) and non-operating assets. This bridge is central to purchase price negotiations.
Related terms
Net debtFinancial debt and similar liabilities less cash and cash equivalents.Multiples methodEstimating value using ratios of comparable companies' market values, or of prices paid in comparable transactions, to financial indicators.Discounted cash flow (DCF)A valuation method based on discounting the free cash flows an asset or company will generate in the future to the present using an appropriate discount rate.BetaA coefficient measuring the sensitivity of a share's return to changes in the market return, that is, its systematic risk.Break-even pointThe sales volume or amount at which total revenue equals total cost and the business makes neither profit nor loss.Capital asset pricing model (CAPM)A model that calculates the cost of equity from the risk-free rate, beta and the market risk premium.
Last updated: October 31, 2026 · This definition is for general information only.