Once we've calculated our EV or Enterprise Value, we then want it to get to our implied share price via the EV Equity Bridge. Well to get over the bridge we start with the Enterprise Value from our DCF model. This is the value jointly held by both debt and equity investors. Going back to our very simple example. We calculate the equity value by subtracting the net debt from the EV remember net debt is your total debt minus cash.

Any cash in the business isn't included in the EV calculation because it's based on the present value of projected future cash flows. Once we're there and we have an equity value. All we need to do is divide by the number of shares outstanding and that will get us to an implied share price. The share price that is implied by all of our DCF assumptions and calculations.