文档介绍：Author: Patrick Cote
bc
Corporate Performance
Measurement
Copyright© 1999 Bain & Company, Inc.
CorporatePerformanceMeasurement
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
Agenda
2
CorporatePerformanceMeasurement
Corporate performance evaluation has evolved from the 1960s focus on ROE to the current variations of economic profit that measure impact on shareholder value
many firms have devised their own variations of economic profit
Stern Stewart’s Economic Value Added (EVA)TM is best known of these measures
Holt/BCG’s Cash Flow Return on Investment (CFROI) is a similar concept presented in % return format
Both ROE and EP are business metrics, tools used to measure the performance of the business
separate from fundamental business drivers, the actual factors that influence shareholder value, and output measures the backward-looking records of pany performance
Focusing on EP instead of ROE decreases the likelihood of destructive behavior by managers
By evaluating managers based on EP, manager behavior can be altered such that only projects that add value (with NPV>0) are undertaken, which does not always occur with ROE
Executive Summary (1 of 2)
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CorporatePerformanceMeasurement
Executive Summary (2 of 2)
End goal of EP exercises is consistent with traditional Bain focus of maximising shareholder value
Bain has measured historical performance with Total Shareholder Return
Stern Stewart devised Market Value Added (MVA)TM as means of measuring market expectations of EP that managers will add in the future
managers’ objective should be to maximise MVA
All economic profit measures deduct charge for use of equity capital from accounting’s e or profit after tax to reflect the opportunity cost associated with equity investments
Stern Stewart has trademarked EVATM by specifying adjustments to m