文档介绍：Value(s)-Based
Management
in the New Economy
Performance Management 2000
April 25, 2000
John Simke (416) 365-8869
john.******@ca. PwC
Agenda
• Value-based management
• How the new economy has
transformed value creation
• The implications for
established businesses
• The value creation model for
the future
• e-world values for superior
performance
• Implementing the new value
system
2 PricewaterhouseCoopers
Value-Based Management
• Drivers of shareholder value
– Sales growth
– EBITDA Margin
– Cash tax rate Free cash flow
– Working capital
– Capital expenditure
– Weighted average cost of capital
– Competitive advantage period
3 PricewaterhouseCoopers
Value-Based Management
• These variables drive economic profit ie. profit after capital
replacement, or essentially “free cash flow”
• Discounted to present value determines shareholder value:
Future free cash flows
Corporate value =
Discounted at
• The seven value drivers are drilled down to specific
performance metrics that are managed on an ongoing basis
4 PricewaterhouseCoopers
Cash Flow is More Reliable than Earnings
EPS does not correlate Cash Flow is a more
well with value reliable indicator
50 50 10 10
5 5
30 30
3 3
20 20 2 2
1 1
10 10
Price/Earnings
2
Market Capitalisation R =
2
R =
S&P Industries S&P Industries (1993) 15 Year range = to
(1993) 15 Year range = to
5 5
(20) (10) 0 10 20
(60) (40) (20) 0 20 40 60
EPS Growth rate Cashflow returns above/below cost of capital
5 PricewaterhouseCoopers
Value-Based Management
• Key weakness of this model is lack of adequate recognition of
innovation
• Also, does not focus adequately on people issues
• Further weakness of VBM is implementation:
– requires mitment to change
– too often es a technical, theoretical exercise
6 PricewaterhouseCoopers
The New Economy Environment
• New business models are
disr