【文章內(nèi)容簡介】 ated B a i n c l i e n t sS amp。 P 5 0 0?0 ?1 ?2 ?3 ?4 ?5 ?6 ?7 ?8 ?9 ?0 ?1 ?2 ?3 ?4 ?5 ?6 ?7 ?8N o t e : M e t h o do l o g y a n d da t a a t t e s t e d t o by Pr i c e W a t e r h o u s e L L P t h r o u g h D e c e m be r 1 9 9 805001 , 0 0 01 , 5 0 02 , 0 0 02 , 5 0 03 , 0 0 03 , 5 0 0Point Change in Indices (1980=0)Framework Output Measures bc Corporate Performance Measurement LON 21 CorporatePerformanceMeasurement Agenda ? Executive Summary ? Objectives ? Background ? Performance Measurement Framework ? Market Value Added (MVA) ? Economic Profit (EP) ? Cash Flow Return on Investment (CFROI) ? Exercises –MVA –Economic Profit ? Case Study Diageo bc Corporate Performance Measurement LON 22 CorporatePerformanceMeasurement 020406080100%Market Value Added (MVA) Invested Capital Goal of Managers should always be to create more shareholder value, or maximise MVA Total Market Value of Firm (includes all debt and equity) Bain?s focus has always been to help the management of the firm to maximise shareholder value, which is equivalent to maximising MVA Market Value Added Definition (1 of 2) bc Corporate Performance Measurement LON 23 CorporatePerformanceMeasurement MVAI nv estedCa pi t alST NIBL*Ne tAsse t sEx cessCa shWorki ngC api talR equ ireme ntsNe t Fix edAssets (nodi stin ct io nbe t w ee nt an gi bl es andin t an gi bl es)S hor t T ermDe btLongT ermDe btS hareho ld ers39。Equi tyM a r k e t V a l u eo f C o m p a n y( D e b t amp。 E q u i t y )T o t a l A s s e t s N e t A s s e t s I n v e s t e d C a p i t a lo r C a p i t a l E m p l o y e d020406080100%MVA equals the total market value of the pany less invested capital or assets. Either the Operating or Financing Approach can be used, but Bain typically uses the Operating approach Note: *Shortterm noninterest bearing liabilities Operating Approach (Typically used by Bain) Financing Approach Market Value Added Definition (2 of 2) bc Corporate Performance Measurement LON 24 CorporatePerformanceMeasurement O p e r a t in gCa sh T o t a l C a s hC a s h R e q u i r e d i nO p e r a t i n g C y c l eE x c e s s C a s hThe first step required to calculate Net Assets with the Operating Approach is to identify excess cash, which is total cash less cash required in the operating cycle Note: *Shortterm noninterest bearing liabilities Amount ($) Market Value Added Operating Approach Excess Cash bc Corporate Performance Measurement LON 25 CorporatePerformanceMeasurement O pe rati ng Ca shP rep aid Ex pen se s an dOt he r Cu rren t Asse t sI nv en t ori esRe cei vab le sA dva nce Pay me ntsAcco un t sPay ab leA ccrue dEx pe ns es an d O the r Cu rren tLi ab il itie s T o t a l I n v e s t m e n t si n O p e r a t i n g C y c l eL i a b i l i t i e s I m p l i c i ti n O p e r a t i n g C y c l eN e t I n v e s t m e n t si n O p e r a t i n g C y c l eNext, The working capital requirements are the firm?s investments in the operating cycle, or the amount of shortterm investment required to fund operations Amount ($) Working Capital Requirements Market Value Added Operating Approach Working Capital Requirements bc Corporate Performance Measurement LON 26 CorporatePerformanceMeasurement When calculating MVA, Net Fixed Assets is defined as Net PPamp。E plus other Investment (tangible and intangible). The third and final step to calculate Net Assets is Net PPamp。E, which is the amount of longterm investment required to fund operations N e t F i x e dA s s e t sP r o p e r t y , P l a n t a n d E q u i p m e n tA c c u m u l a t e dD e p r e c i a t i o nO t h e rI n v e s t m e n t sAmount $ Net PPamp。E Market Value Added Operating Approach Net Fixed Assets bc Corporate Performance Measurement LON 27 CorporatePerformanceMeasurement Market V al ueAd de d (MVA)I nve stedCa pi t alPV of EPsBe y on d Y ea r 5P V of E PYea r 5P V of E PYea r 4P V of E PYea r 3P V of E PYea r 2P V of E PYea r 1M a r k e t V a l u e o f t h eC o m p a n y ( D e b t + E q u i t y )M a r k e t V a l u e A d d e d( M V A )0204060801 0 0 % Market value added (MVA) reflects the markets expectations of the EP managers will add in the future Percent of Total MVA is the market’s expectation of discounted future EPs Market Value Added Link to EP bc Corporate Performance Measurement LON 28 CorporatePerformanceMeasurement After extensive work by a diligent Bain team, Acme Industries is expected to generate $25M in economic profits next year, which is expected to grow at 3% forever. If the cost of capital is 13% and the invested Capital is $100M, what is the MVA and the market value of the pany? Market Value Added Link to EP Example bc Corporate Performance Measurement LON 29 CorporatePerformanceMeasurement After extensive work by a diligent Bain team, Acme Industries is expected to generate $25M in economic profits next year, which is expected to grow at 3% forever. If the cost of capital is 13% and the invested Capital is $100M, what is the MVA and the market value of the pany? MVA = PV of EPs = $ 25 M 13% 3% = $ 250 M = MVA + Invested Capital = $ 250 M + $100 M = $350M Market Value of the Company Market Value Added Link to EP Solution bc Corporate Performance Measurement LON 30 CorporatePerformanceMeasurement EP measures managers? performance in the past, since it represents the m