Shareholder value
Communicating it is as important as creating it
Overview
Shareholder value: it’s what business is all about, it’s the bottom line. But creating, maintaining and communicating shareholder value is an increasingly complex process. In a post-financial crisis economy with markets in flux and investors still tentative, creating shareholder value is a bigger challenge than it’s ever been. And as companies compete for available dollars, it’s difficult to identify an opportunity and know how to take advantage of it.
Beyond building value, companies often neglect to communicate value – the processes that drive it and the metrics that define it – to shareholders or to the enterprise at large. If value isn’t both fixed in corporate culture and disseminated clearly to shareholders, confidence and future investments can be imperilled and growth initiatives put at risk.
The cost of failure in today’s market is high. To stay ahead of the competition, you need the tools and methodologies that make shareholder value understandable, achievable, and demonstrable as a key driver of financial performance.
These capabilities allow you to integrate data capture, processing, analysis and information with key finance process requirements.
Make sure you’re working with the right tools
No matter how in-tune your executives are with the overall goals of the business, they may have difficulty understanding, measuring, forecasting or communicating the effects of their strategies on shareholder value. Deloitte provides a suite of tools designed to disseminate value creation throughout the organization as a principle and an outcome, from high-level decision-making, to investor behaviour, to day-to-day operations. Our range of value creation services, from benchmarking to resource allocation to investor-focused analysis, helps you increase financial performance and build investor confidence.
- Enterprise Value Map™ (EVM) provides a visual framework for linking your strategies, initiatives and operations to shareholder value. The EVM is based on four key drivers of value: revenue growth, operating margin, asset efficiency and expectations, with each driver broken down into specific levers you can use to improve your operations and increase shareholder value.
ValueAnalytics™ analyzes your company’s operational and financial performance history to determine whether your business is creating or eroding value. In addition to quickly generating a customized and detailed analysis of your company’s internal performance, ValueAnalytics™ offers a point-by-point comparison to your peers.
- ValuePrint™ helps you measure the business value of investments and to develop rigorous business cases. In addition to defining the scope and goals of a business case, ValuePrint™ provides a financial cost/benefit analysis the proposed investment to help you select among the various investment alternatives.
- Portfolio value optimization helps you see beyond the costs and benefits of individual projects to better understand and manage your entire project portfolio and its effect on business performance. It’s designed to align your project portfolio with overall business objectives, support resource-allocation decisions and help stakeholders understand how each project contributes to the value creation process.
Our value creation services provide real benefits
- Translate financial metrics into tangible, consistent, organization-wide activities
- Develop and communicate a clear vision for creating shareholder value
- Align your portfolio of initiatives with objectives and strategies
- Link performance management to concrete metrics
- Align business planning and budget allocation with the initiatives most likely to create shareholder value
- Communicate key value information across your enterprise in clear, common language
- Track project performance and objectively measure ongoing benefits
- Enhance investor confidence and attract financing
Drive value and performance across the enterprise
To create and protect value over time, you must make value creation a vital part of enterprise life. Deloitte value creation services provide a consistent framework for evaluating projects, aligning them with strategic goals and making end results understandable to, and actionable for, all stakeholders.
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