Shareholder Value presents a powerful and useful toolkit of market-based perspectives, analytic approaches, valuation techniques, and specific financial metrics for use in everyday business life.
The author helps a broad spectrum of professionals understand the salient points and real world implications of a 'value management' movement which has taken hold in many corporations in the United States and around the world. This movement is being supported by some of the major institutional investors who influence financial markets.
The main goal of 'Shareholder Value' is to help working professionals grasp the concept of value 'creators' and 'destroyers', along with the implications. He also provides tools to measure the success (or failure) of major strategic and operational initiatives and enables corporate managers to understand how shareholder value is created, and then directs behaviour toward 'value-based' planning and action.
Although mainly aimed at the professional market, 'Shareholder Value' will also be of use to students of business and finance as it is intended to provide a comprehensive foundation for important elements of business strategy and acquisition valuation, corporate financial analysis, capital investments, corporate financing and economic value based metrics.
When developing this book, I strived to achieve the following:
- Provide the finance professional and student of finance with a comprehensive template of shareholder value concepts and techniques - geared toward use in a corporate setting
- Give the non-financial professional an understanding of the underpinnings and behavioural aspects of economic value management
- Outline and provide details of an effective process for implementing a value-based financial performance system within a corporation
- ...And, combine learning with enjoyable reading by presenting technical material through a story.
The "story" and "characters" are unique features of Shareholder Value - A Business Experience. The reader can get an appreciation of the environment surrounding value-based management, along with challenges that arise when transitioning from traditional "accounting" performance (where earnings and earnings per share reign supreme) to "economic" performance (where cash flow and return on investment are emphasized). Characters occupying operating and staff roles have been created to represent people that those working inside companies (large, medium and small) may encounter and, also, to invoke some humour. Insights into how to function in different corporate roles can be gained by following the characters through the story.
- Presents a combination of analysis and case study in which a strong technical treatment is blended with a fictional case study to offer clarity and explanation
- A practical and effective implementation process for a comprehensive financial performance system
- Offers a perspective of the role of different corporate and business unit functions in the implementation of value-based financial performance within a company
Corporate Financial Analysts (CFAs); Chief Executive Officers (CEOs); Chief Financial Officers (CFOs); Business/Corporate Development Executives/Managers; Analysts/Planners; Managing Directors; Students on MBA or Masters in Finance courses
Getting started; Shareholder value and sustainable value: definitions and perspectives; Value-based metrics: from accounting to economics; Cost of capital; Economic profit assessment: value 'creators' and 'destroyers'; Financial 'drivers': support measures; Market value added: 'magnifier' concept; Value-based analysis: valuation hierarchy; Valuation methodologies; Corporate financial analysis: business unit valuation, business unit values and cash flows, sustainable revenue growth; Value driver programs: major internal investments; Mergers & acquisitions: major external investments; Capital investments: planning, evaluation and control; Financial reporting and communication: traditional/modification/new; Epilogue.
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- © Butterworth-Heinemann 2001
- 23rd October 2001
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Thirty years' experience in financial management and business consulting. Clients have included FMC Corporation, Valmont Industries, First Data Corporation, Monsanto, Baldwin Technology Company, Pitney Bowes, PAMIDA, and Merrill Lynch. Since 1988 he has also served as chief financial officer director and advisor for a technology company he helped launch.
"Shareholder Value: A Business Experience is a "must read" for CFO"s and their financial managers. Roy E. Johnson presents a technical subject using an enjoyable narrative to which any business person can relate. He explores innovative financial principles in a practical way - fostering effective implementation in the real world. The value-based financial performance concepts and approach detailed in this book have been successfully implemented in our company, radically improving the way we manage growth in the business." --Michael A. Patterson, Senior Vice President and Chief Financial Officer, DFB Pharmaceuticals
"Rich with insights for effective implementation of value-based management - specifically, the ongoing issues and discussions that arise and the personal vantage points that must be considered to keep the process "on track". The book sets forth the value-based financial performance framework with succinct formats to facilitate learning while, at the same time, enabling the reader to experience the implementation in a personal way. Having collaborated on client assignments with the author, I can attest to the integrity and realism of the experience and, also, to the line of sight financial "drivers" so necessary as a foundation for value-based incentive compensation and corporate communication." --Mark C. Ubelhart, Value-Based Management Practice Leader, Hewitt Associates LLC
"All MBA students and recent graduates should read this book. It uses some of the modern finance concepts that are now standard in the MBA curriculum. That"s the easy part. Roy Johnson"s book will also give you an appreciation of the hard part - how to get people in business to understand and effectively use modern finance concepts. Readers will learn a lot about finance and, more importantly, about changing a firm"s culture toward a focus on value creation. Observations from an extensive corporate and consulting career breathe life into the characters, making this book an extremely informative and interesting read." --Dr. Carl M. Noble, Jr., Chairman, The Alcar Group Inc. and Adjunct Professor, J. L. Kellogg, Graduate School of Management