Premium Essay

Identifying Value Creators

In:

Submitted By 41558831
Words 2179
Pages 9
Financial Management CASE STUDY NO.2
IDENTIFYING VALUE CREATORS 1. Defining case issue
Based on the issue Linda faced, she needs to assess which company create or destroyed value for investors, it should be included to the value analysis, which means using value ratios to show the “embedded value” in stocks in order to screen and assess the invest value before making investment.
So in our case report, we will solve three case issues: (1) To make value analysis of the pairs of Asian and American firms in different industries; (2) To understand how to use EVA, such as the differences between EVA and other financial ratios, advantages and disadvantages. (3) To make value comparison analysis among different industries and market conditions, try to find the reason behind the result. 2. Evaluation of value analysis tools---EVA
Economic value added is a quiet new performance measure, which was invented by G. Bennet Stewart and Joel Stern. Simplified, EVA is a measurement tool that determines if a business is earning more than its true cost of capital. This measure is used in managerial purposes, because it gives managers a clearer idea of whether they are creating or destroying shareholder wealth. There are many value drivers that need to be managed, but there can be only one measure that demonstrates success. A single measure is needed as the ultimate reference of performance to help managers balance conflicting objectives. When we are using a NPV value we need to see at result of IRR (Internal Return Rate) for which we use the same period as we used for NPV. It means that we can’t see clear current situation and actual performance, we should have period of time to see a business performance to consider a capital investment. Measures as earnings and EPS (Earnings per share) we can identify more for acquisition purposes. However the best advantage

Similar Documents

Premium Essay

Identifying Value Creators

...FINANCIAL MANAGEMENT CASE REPORT 2 IDENTIFYING VALUE CREATORS Denis Vassilyev 201105020 Temple Uwalaka 201105018 04/16/2012 OVERVIEW In the given case we are supposed to prepare a comparative financial performance analysis for companies within different industries and different geographical regions in terms of value creation. From a financial perspective, value is said to be created when a business earns a return on capital that exceeds the cost of capital. For that analysis we are offered to use several methods which could show controversial indicators. In that case will try to identify which method is more effective and fair in circumstances described in the case. There are fourteen companies, two for each industry to analyze. ANALYSIS BY INDUSTRY In this section, we will take a peep in the value creation of companies within an industry and see how they are faring. COMPUTER HARDWARE-PERSONAL COMPUTERS INDUSTRY in the computer industry, Apple and Acer were the two companies that were given. One important thing here is that apple is an American Company whereas, Acer is a Taiwanese company. It is like Asian versus America. Looking at their data and financial analysis, it is obvious that Apple is a growing company that holds lots of promise in the future, while Acer is a mature company that is losing its grip on the market. Between 1996 and 1997, Apple posted a net loss but improved on that from 1998 to 2000. Within this period, Acer posted profits as...

Words: 2789 - Pages: 12

Premium Essay

The Medicines Company

...criteria: 1) Required less than four years to get to the market 2) Required less than $60 Million to get to the market 3) Had at least a 65% chance of getting to market 4) Had the potential to generate at least $100 Million per year in sales In March 1997, the company got control of the rights to an anticoagulant called Angiomax which has been developed by Biogen but abandoned after test results showed it to be no more effective than the cheaper, entrenched alternative, Heparin. In December 2000, the Medicines Company received FDA approval for the use of Angiomax to prevent blood clots during angioplasties and by early 2001 had taken the drug to the market. The Value of Angiomax to hospitals Angiomax is a blood thinning drug, or anticoagulant which achieved Phase III clinical trials with Biogen, its pharmaceutical creator, in 1994. Upon trial III completion, further investment and trials for the drug were abandoned due to what was understood as marginal results and the forecast of high production costs. Its rights were later purchased by The Medicine Company who continued clinical trials, securing FDA approval and introducing Angiomax to the U.S. market in 2001. Heparin, is the most widely used prescribed drug for acute coronary treatment. It was discovered in 1916 prior to patent protection rules and is now a drug viewed largely as a commodity. While Heparin is less expensive per dose than Angiomax, clinical studies have demonstrated a higher rate of death, heart attack, need...

Words: 689 - Pages: 3

Premium Essay

Simone Weil Concept Of Justice

...Human rights equate to the extent of possession and value, which diminishes the meaning of justice. Justice shall be equated as a spiritual virtue that is based on compassion and love which in return illuminate’s human obligation. Simone notions that the human obligation is unconditional, it is a presumed responsibility to love thy neighbor and to endure the anguish of discomfort for the comfort of others. In other words, the main objective is to equalize the well-being of all by repudiating one’s self in the name of divine justice. Every man is antagonized at the forefront of affliction, and the unpretentious consideration of one’s suffering will unite societies together in communal empathy. Affliction is the price humanity must pay to be humbled by the grace of God. To accrue the divinity of God, there must be a presence of love and comfortability with truth. Simone indicates that the only way to fully consent to Gods divine love and justice is when all actions are done out of compassion for others. She defines this as a certain madness; the type of madness that overcomes all social commands, corruption, and...

Words: 826 - Pages: 4

Premium Essay

Christianity and Islam

...world: Christianity and Islam. Religion has served in many societies as a mean of structure or social control, with rules that govern how people interact socially. We will be looking at the origin, similarities, differences, beliefs and festivals of each religion. Invariably, our aim is to ascertain through research data and interviews why Christianity is the world’s most popular religion, but more so why it is deemed most superior. Statement of Qualification. Our group strongly believes in the fundamental teachings of Christianity, having been exposed to its teachings from early childhood. We are respecters of all religions hence our research topic, to bring about a greater level of understanding of both, while identifying the beliefs and values these two great religion is built on. Based on our own individual experiences and personal realization of nature and how things are interconnected, we conclude that there is definitely a higher power that oversees everyone and everything, and it’s faith in this higher power that brought birth to Christianity. Review of Literature Religion is a controversial topic that has been debated with great enthusiasm by sociologists, theologians, and even students; some argue that the belief in religion is for closed minded individuals. One sociologist aimed to defend the fact that religion is an act of close minded thinking, he explains “if one religion is right then it means the entire world of religions...

Words: 1350 - Pages: 6

Free Essay

Thinking Essay

...NAME LIBERTY Critical Thinking Project essay The Hindu are said to believe in the eternity of the soul. The Hindu claim that what we see in existence is a unconscious extension. However, Barhman is considered as the only true real thing. This can make it very hard to understand Hinduism but some views Brahman as the creator. The fact that Hindus have many Gods can be a game changer. It might be very difficult for them to get an answer to a question. Although Brahman seems to be the unify figure. What does it mean to be a human? Every has a different meaning to that. Hinduism suggests that human beings in all creation are the highest point of life. Hinduism suggests that they may take many births in lower forms. All forms of living being manifest God and plants and animals, should be worshiped because they give us food. Hinduism has four principles. They are having pleasure, harmony, wealth, and liberation. Pleasure and wealth consume people by causing suffering and the other fulfills them. The purpose of life in Hinduism is to understand one identity as the soul and to fully understand the truth. The entails identifying the wrong and right and how one is meant to live. Hindus strive to became Moksha( or free from the devil or and evil.) They have to do away with all the evil deeds and the wrongs to achieve the status. They live though the practice and correcting living dharma. Connected with Karma or (action) and reincarnation is usually...

Words: 527 - Pages: 3

Free Essay

Ncwnji

...tax-payer. 5. Write down the name of 4 public sector organisations. * Police * School * Army * Ambulance 6. Find out what the broad aims of the Voluntary Sector. Maximise self-satisfaction. 7. Write down the name of 4 voluntary sector organisations. * Oxfam * Red cross * Love underdogs * Kids in Asia 8. Go onto the web and find out the aims and objectives for one of the private sector, public sector and voluntary sector organisations that you have listed above. Private sector: Tesco- To grow the UK core, To be an outstanding international retailer in stores and online, To be as strong in everything we sell as we are in food, To grow retail services in all our markets, To be a creator of highly valued brands and...

Words: 588 - Pages: 3

Premium Essay

Text in Time - Frankenstein and Blade Runner

...The texts in time elective allows us to compare how a treatment of similar content in a pair of texts composed in different contexts may reflect changing values. How has this been revealed though your comparative stuffy of Frankenstein and Blade Runner? By juxtaposing texts, their paradigmatic undercurrents emerge, with timeless scientific and ontological concerns transcending contextual discrepancies. Shelley’s 1818 gothic novel, Frankenstein, written in response to the Industrial Revolution, and its prospering advancements, values the moderation of scientific endeavour connected to the enlightenment. Similarly Scott’s neo-noire film, Blade Runner is in response to the impact of his 20th century, consumer driven society on mans ethical framework, condemning progression of technology through his depiction of a dystopian future. Ultimately Frankenstein and Blade Runner are cautionary tales when explored individually, however when examined comparatively, values presented in each become more comprehensive for both contexts and enduring audiences. Shelley’s retrospective depiction of a milieu exploited by scientific egotism embodied by Frankenstein highlights the disruption of nature, and criticizes the 18th century enlightenment in relation to Frankenstein’s galvanistic approach to knowledge. The Declaration in the text “I will pioneer a new way, to explore unknown powers,” underscores victor’s ambition for knowledge, his egotistical desire to control nature and his...

Words: 847 - Pages: 4

Free Essay

Business Ops

...In Europe, online retail sales will hit €128B this year. A few highlights of note for US sales: * Three categories capture over one-third of that total. Yes, only three! Apparel and accessories alone are a $40B-plus sector (which probably explains the heavy investment of players like Amazon in the space), followed by consumer electronics and computer hardware. * Overall web penetration is 8%. That may not seem very remarkable, but that figure is deceptive because it’s weighed down by the grocery/food and beverage category, which is one of the largest overall but least penetrated online. In fact, if we exclude grocery from the mix, overall eCommerce penetration in the US jumps to 11% of overall retail. * eCommerce is a jobs creator in the retail sector. For the first time, we have estimated the total employment in the US that results from the online retail sector. Our estimate is that over 400,000 individuals are employed in some web retailing function, of which more than half are salaried professionals (i.e., all non-fulfillment and call center employees). Furthermore, many of these salaried positions have promising long-term career growth trajectories. Given that there are probably about 750,000 such salaried jobs overall in retail (my estimate, approximately 10% of the 7.3M people employed in retail overall), the fact that the eCommerce sector has nearly 200,000 of them is a remarkable testament to the employment impact of this sector. In Europe, we anticipate...

Words: 745 - Pages: 3

Free Essay

Cinema

...retrain their skill-set through higher education. This is particularly important in challenging times like now. The need to change, innovate and respond appropriately is no longer a luxury. It is a necessity for survival and relevance. The role of Human Capital is important and significant because of the positive correlation to economic growth and societal development. Hence, UCSI Blue Ocean Strategy® challenges these old paradigms and offers the Strategic Human Capital Using Blue Ocean Strategy® 2–Day Workshop. Through the workshop, participants will learn the skills they need to align human resources goals and budgets with their organizational mission. In addition, participants will also understand the role of metrics and data in identifying desired outcomes and measuring progress toward the identified outcomes. Objectives * To introduce Blue Ocean Strategy® systematic methodology in Strategic Human Capital Planning and Execution. * Master the new business administration of strategic human capital. * To create a new way of thinking and approach in dealing with the current strategic challenges in Human Capital Development. * To increase skills in conducting high quality and market driven research to meet global standards. * To develop a new way of thinking and approach in dealing with the current strategic challenges in Human Capital Development Importance of...

Words: 1418 - Pages: 6

Free Essay

Marketing

...Brazil, isotonic drinks in Indonesia. Five years ago, these categories were barely on the radar in these countries. By 2011, they ranged between $400 million to $890 million in revenues in these markets, generating significant profits for the companies that took the initiative to introduce them. Emerging markets may be expanding at a record-setting pace, but many also are undergoing rapid category consolidation. It’s to the point where, in many cases, the top three to five players now control the lion’s share of a category in any given market. Consolidation can slim margins for incumbents and limit opportunities for new players. That leads some consumer goods companies to survey the landscape and conclude they’re locked out. But the fact is, identifying new categories and subcategories and building them from scratch can serve as a powerful path to growth (see Figure 1). It allows companies to surmount the consolidation hurdle and capture their share of consumers’ rising disposable income. For those that understand how to...

Words: 4893 - Pages: 20

Premium Essay

Professional Ethics

...Based on the Value Paradigm as seen in fig.1 “Understanding Human Values” you are tasked to make some listing on how the following value indicators below truly make a difference in the values of people. Language – the way they speak Music, dance art and images of feelings – it gives sense of identity to every individual, creating in person uniqueness and a way of identifying oneself within a certain group. Food and the way they eat – distinguish an individual from the rest through the way that he/she chooses foods to eat. Foods that he/she chooses and eat define him or her through physical aspect and his/he belief in manipulation of foods. Recreation – activity or activities that allow an individual to spend his free time in a more constructive manner. This gives an individual immediate and inherent satisfaction. Dress – signifies somewhat an status symbol for a person because if he dresses in a way that is different from the others he becomes known to them. Beliefs – convictions of people that leads him towards the achievement of his goals and thus makes him successful. Likes – sense of having an interest towards certain people or things which makes an individual keener on his works or projects. 2. Figure 2 provides an understanding of how values are communicated, and who the Values Communicators are. Discussion on “Why do you think our parents are considered number one communicators of values?” Parents are considered number one communicator of values because...

Words: 2107 - Pages: 9

Free Essay

Xyz Xyz

...Chanakya’15 Pre-process The journey of Bajrangi Group started as a supplier of wafers and namkeens to local brands. Due to the shore supply of that product they decided to make their own product line. The fame of taste reached to the whole Gujarat hence it was time to take over the whole Gujarat. Chataka Pataka Tangy Tomato Snacks happens to be all over Gujarat — present in almost every paan shop and organised retail outlet, but with no jumbo billboards screaming its delights. With simple ideas that may seem outlandish in this age of brazen marketing, Chataka creator Bajrangi Wafers Pvt Ltd has managed to fend off bigger players like LasyCo and Jagilram's in the Rs 600-crore Gujarat market. Bajrangi survives solely on word-of-mouth publicity. This publicity comes from the Gujarat-based snacks maker's ability to localise flavours. Bajrangi understands the palate of the consumer well. Indeed, Bajrangi products like Chataka Pataka, Ratlami Sev and Sing Bhujiya, among others, suit the tastes of a specific market. The company offers masala wafers to cater to the Gujarati palate, chaat masala for the Maharashtra market and a range of spicy snacks for Rajasthan. Here, it scores over Jagilram's, which too has flavours to cater to the North Indian palate, by a better understanding of the Gujarati consumer. Bajrangi's pampers the Gujarati's sweet tooth by keeping its khatta-meetha less spicy. Bajrangi‘s product mix is just right. Bajrangi’s share of the local potato and vegetable...

Words: 977 - Pages: 4

Premium Essay

Research, Statistics, and Psychology

...human beings and behaviors would go unanswered as well. Using and relying on the scientific method, psychology uses the research and statistics gathered to prove or disprove thoughts and theories. The importance of statistics in psychology is that they help in determining if research findings are not substantive or substantive. Not only do research and statistics play a part in psychology, the roles of the scientific method, primary data, and secondary data contribute as well. Research and the Scientific Method Research is the collection and evaluation of information or data about a particular subject (Nordquist, 2013). Psychology research is about values, variables, and scores. Values are categories or numbers, variables are characteristics or conditions that can have different values, and scores are a particular individual’s value on a variable (Aron, Aron, & Coups, 2009). Psychological processes confirmed by research to occur outside one’s awareness with several associations between behaviors, and feelings, or situations guiding one’s behavior, either unconsciously or implicitly (Kowalski & Westen, 2011). There are several types of research methods, which include archival research, naturalistic observation, survey research, and case studies. Feldman, (2010) “research is the systematic inquiry aimed toward the discovery of new knowledge, which is the main element of the scientific method in psychology” (p. 26). The Scientific Method is a set of procedures and principles used...

Words: 1034 - Pages: 5

Premium Essay

Media

...Film Theory and Approaches to Criticism, or, What did that movie mean? by Christopher P. Jacobs Movies are entertainment. Movies are documents of their time and place. Movies are artistic forms of self-expression. Movies we see at theatres, on television, or home video are typically narrative films. They tell stories about characters going through experiences. But what are they really about? What is the content of a film? DIGGING DEEPER: FOUR LEVELS OF MEANING Recounting the plot of a movie, telling what happens, is the simplest way to explain it to someone else. But this is neither a film review nor a film analysis. It’s merely a synopsis that anyone else who sees or has seen the movie will likely agree with. This level of content may be called the referential content, since it refers directly to things that happen in the plot and possibly to some aspects of the story that are merely implied by the plot. In John Boorman’s Deliverance (1972), four men from the city go on a weekend canoe trip that unexpectedly becomes a life or death struggle for survival of man against man and man against nature. Some characters survive, others don’t. Most films can be analyzed more thoroughly to reveal deeper levels of meaning. A review (perhaps 400-1200 words) typically includes personal impressions and evaluations of a movie’s content and techniques. A good review may be subjective, yet still touch superficially on topics that might be explored in more detail in a longer...

Words: 3055 - Pages: 13

Premium Essay

Addressing Challenges of Groups and Teams

...Phoenix Lois Mason April 15, 2012 Addressing Challenges of Groups and Teams Desert Communications Incorporated is a major wireless telecommunications organization experiencing a decline in net profit. This decrease is attributed to a change in the communications industry and a decline in the demand of communication products. Desert is beginning a strategic movement to reallocate its resources to capitalize on the added communication services in the industry. A team has been assigned to integrate strategies that will help generate the profit needed in regard to its call center. Contained in this paper is the strategic plan created by the team to aid in team and management collaboration, training programs, and tactics in identifying and minimizing conflict within teams. Presenting the Operational Change Before the team creates a strategic plan, management should not inform employees of the change because this may create problems among the employees. They may think jobs are at risk or the company is closing. After the plan is created, management should provide employees with details of the plan that affect them. These details will include the organization’s mission, how it intends to fulfill that mission, and the plan to train employees and provide them with the tools needed to perform effectively their tasks during and after the operational change. Training of Multiple Audiences Training provides education, raises awareness, opportunities to prevent fraud, improve...

Words: 1715 - Pages: 7