investment in current assets like inventory and trade receivables will reduce cash-flows and therefore shareholder value.Ħ. investment in non-current assets to finance projects would reduce cash-flows and therefore shareholder value.ĥ. Incremental fixed capital investment rate e.g. growth in sales from one period to the next.Ģ. Alfred Rappaport developed seven 'value drivers' which can be used to improve shareholder value.ġ. Value based management can often be referred to as shareholder value analysis (SVA).Ī value driver is any variable which significantly affects the value of an organisation. Value being measured by share price (market capitalisation), dividends and other principles such as RI or EVA. Value based management (VBM) is an approach which focuses on strategies and actions to create more value for shareholders.
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