In this workout, we're going to examine a, some of the parts valuation for Sherwin Williams.

Sherwin Williams is a big paint maker in the us.

It has three major segments that it reports on.

It's interesting because it's part geographical, the Americas and part product based consumer brands.

Performance coatings and the EBITDA are quite different for each one, and that's the level of detail we'd like to get.

In this sum of the parts valuation, it's certainly more accurate doing it this way than trying to find one overall multiple.

For show In Williams. To do that would mean finding a company that operates in the same segments, in the same proportions in the same way, which would be very difficult to do.

Our first job is to find the enterprise value for each segment.

To do that, what we're going to do is get the EBITDA and then multiply it by the target multiple, which marries up with that ebitda.

We then copy that down and we find the enterprise values of the individual segments are as follows.

We would then grab a total, and this would be the predicted enterprise value of the entire operation of Sherwin Williams.

We would take into account their net debt and we would cross the bridge over to equity value.

If we then wanted to go down to a single share value as part of our analysis, we could do that by dividing the implied equity by the number of shares.

There is a chance that we would want to apply a conglomerate discount to this type of valuation if we felt that the operations of the segments were very diverse and perhaps did not synergize particularly well.

But in this case, we have not done that.