From adjusted EBITDA to equity value

The bridge is struck at one completion month and reads downwards. Every line carries the sign of its contribution to equity value, so the column adds up.

Three settings sit above it: the entry multiple, the completion month and the period over which the normal level is averaged, set by the user. The figures follow as they move. With less history than that period needs, the report shows no deviation and no equity value.

Every balance sheet account carries exactly one treatment in the account mapping: working capital, cash, debt or excluded. Each balance therefore counts once, either in working capital or in net debt.

Positions lists the accounts behind each line, grouped as on the working capital page, and the deviation from the normal level. Working capital is read from the working capital view and is the same figure. In the group report, intercompany balances are eliminated before net debt, and any part that does not net is shown as a figure of its own.

The view opens on Issues. From the receivables and payables ledgers it takes three kinds of position a buyer's diligence would question: stale receivables, disputed receivables and stretched payables. Each category carries its documents, its total and a switch.

Every switch starts off, so the bridge begins from the trial balance. A receivable switched on leaves working capital, and a stretched payable joins net debt.

The group report adds two tabs. IC Elimination checks month by month that what one entity bills within the group another books as a cost. IC Reconciliation checks that intercompany balances agree between the entities, and names the accounts to open and the booking that closes a difference. Corrections are made in the books and appear at the next build.

Buyer View models the deal the way a financial buyer would: sources and uses, then the hold year by year with EBITDA, interest, tax, capex, the change in working capital, free cash flow, net debt, leverage, debt service cover and covenant headroom. Exit and value creation follow, split into EBITDA growth, multiple expansion and deleveraging.

Tax rate, interest rate, capex and working capital intensity are measured from the company's own history, each shown with the figures it rests on. Leverage, debt rate, covenant, hold period, growth and the exit multiple are settings.

Download Excel writes the bridge as one workbook across all years, with the baseline as measured. Its Issues sheet goes into the workbook only when the company decides to disclose it.