医疗行业贝恩--业绩评估英文版）.ppt

Author PatrickCote Contributors KateMcGreevyJulianCritchlow bc CorporatePerformanceMeasurement April1999 Copyright 1999Bain Company Inc ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded MVA EconomicProfit EP CashFlowReturnonInvestment CFROI ExercisesMVAEconomicProfitCaseStudy Diageo Agenda Corporateperformanceevaluationhasevolvedfromthe1960sfocusonROEtothecurrentvariationsofeconomicprofitthatmeasureimpactonshareholdervaluemanyfirmshavedevisedtheirownvariationsofeconomicprofitSternStewart sEconomicValueAdded EVA TMisbestknownofthesemeasuresHolt BCG sCashFlowReturnonInvestment CFROI isasimilarconceptpresentedin returnformatBothROEandEParebusinessmetrics toolsusedtomeasuretheperformanceofthebusinessseparatefromfundamentalbusinessdrivers theactualfactorsthatinfluenceshareholdervalue andoutputmeasuresthebackward lookingrecordsofoverallcompanyperformanceFocusingonEPinsteadofROEdecreasesthelikelihoodofdestructivebehaviorbymanagersByevaluatingmanagersbasedonEP managerbehaviorcanbealteredsuchthatonlyprojectsthataddvalue withNPV 0 areundertaken whichdoesnotalwaysoccurwithROE ExecutiveSummary 1of2 ExecutiveSummary 2of2 EndgoalofEPexercisesisconsistentwithtraditionalBainfocusofmaximisingshareholdervalueBainhasmeasuredhistoricalperformancewithTotalShareholderReturnSternStewartdevisedMarketValueAdded MVA TMasmeansofmeasuringmarketexpectationsofEPthatmanagerswilladdinthefuturemanagers objectiveshouldbetomaximiseMVAAlleconomicprofitmeasuresdeductchargeforuseofequitycapitalfromaccounting stypicalnetincomeorprofitaftertaxtoreflecttheopportunitycostassociatedwithequityinvestmentsSternStewarthastrademarkedEVATMbyspecifyingadjustmentstomaketoEP Agenda ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded MVA EconomicProfit EP CashFlowReturnonInvestment CFROI ExercisesMVAEconomicProfitCaseStudy Diageo Objectives TherearethreeobjectivesoftheCorporatePerformanceMeasuresModule TodefinethemostpopularmeasuresofcorporateperformanceToexplainthesignificanceofthesemeasuresinthecorporateenvironmentandpotentialapplicationsinBain sstrategyworkTooutlinecalculationsofeachperformancemeasure Agenda ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded MVA EconomicProfit EP CashFlowReturnonInvestment CFROI ExercisesMVAEconomicProfitCaseStudy Diageo Withtheriseofconglomerates mostcompaniesfocusedonReturnonEquity orROE astheirprimarymeasureofperformanceledmostmanagerstoundertakeacquisitionssolelytomanipulateaccountingfigures 1960s 70s 1980s 90s Withtheincreasedfocusondeliveringshareholdervalue managershaveacceptedsystemsthatmeasurethechangeinvaluemanagersrealisedequityisnotfreeeconomicprofit EP meetstheseneedsbytellingmanagerswherevaluehasbeencreatedandwhereithasbeendestroyedAsaligninginterestsbetweenownersandmanagershasbecomemoreimportant tyingmanagementcompensationtoEPprovidedapopularsolution Corporateperformanceevaluationhasevolvedfromthe1960sfocusonROEtothecurrentvariationsofeconomicprofit EP thatmeasureimpactonshareholdervalue Background CorporatePerformanceEvaluation BainwasthefirstofmajorconsultingfirmstofocusoncreatingshareholdervalueToachievethis BainhasusedtheoutputmeasureofTotalShareholderReturnandtheaccountingmeasuresofROEandROIModifiedaccountingmeasures suchasEP provideanalternativemeansofmeasuringthecreationofshareholdervalue Background RelevancetoBain Toillustratetheroleofcorporateperformancemeasuresandresourceallocationtostrategywork anexaminationofMarakon s program isusefulMarakonappliesthefollowingprogram whichcantakeseveralyearstocomplete toallofitsclients assesstheeconomicprofitofallcustomersegmentsandproductlinescomparecompanyperformancetoindustryperformanceinvestigatethreeormorestrategiesforeachbusinesseveryplanningcycleshiftresourceallocationfromeconomicallyunprofitableproducts customerstoeconomicallyprofitableleadstoyieldlossforMarakonandclientssinceadditionalscenariosfrequentlyevaluated Marakonhasmadeeconomicprofit EP thecentralfocusofthe program theyapplytoeverycase Background LinktoStrategy EVAisaregisteredtrademarkofSternStewart Acenturyago AlfredMarshallexplainedthatforacompanytohavegenuineprofits theprofitsmustbesufficienttocoverthecostofcapitalaswellasthefirm soperatingcostsSternStewarthasre packagedtheconceptintoEVA whichisessentiallyamorepalatableformofthesameideaMcKinseyhasbeenusingeconomicprofitformanyyearsBCGusesCashFlowReturnonInvestment CFROI forasimilaranalysisToavoidinfringinguponSternStewart strademark manyconsultingfirmshavedevelopedtheirowntermsforthesameconcept HownewisEconomicValueAdded EVA EVATMisonevariationofEP Background EconomicValueAdded Agenda ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded MVA EconomicProfit EP CashFlowReturnonInvestment CFROI ExercisesMVAEconomicProfitCaseStudy Diageo Measures ForadiscussionofWACCanddiscountrates pleaseseetheInvestmentAppraisalModuleintheBVU Description EVA MVA EP andCFROIaremodifiedaccountingmeasuresusedtomeasuretheperformanceofthebusiness Inputs Measures FundamentalBusinessDrivers BusinessMetrics OutputMeasures Primarybusiness specificfactorsinfluencingshareholdervalue Toolsusedtomeasureperformanceofbusiness Backward lookingmeasuresofoverallcompanyperformanceasviewedbymarket OperatingprofitsvolumepricecostsFinancialCostofCapitalEmployedfixedassetsworkingcapitalWACC AccountingROEROAModifiedaccountingEVA MVA EPCFROICVA TotalShareholderReturn TSR TotalBusinessReturn TBR Framework Thefundamentalbusinessdriversprovideaframeworkforidentifyingthesourcesofshareholdervaluecreationordestruction ShareholderValueCreation Destruction OperatingProfit CostofCapital Volume Price Costs WorkingCapital WACC FixedAssets X X DirectcostsmateriallabourIndirectcostsSG ADepreciation Averagesellingprice ofunitssold WeightedaveragecostofcapitalbasedonmarketvaluesofdebtandequityUseafter taxcostofdebt Currentassetslesscurrentliabilities Property plant equipmentIntangibles LIFOvsFIFODepreciationestimates Costofequityforprivatefirms Intangiblemeasurement Components Issues Framework FundamentalBusinessDrivers SometimesreferredtoasReturnonInvestment ROI ROEmeasuresreturnstoshareholders whileROAmeasuresreturnstoinvestorsofallformsofcapital Formula Measures ROA Profitabilityofallcapitalemployed includingdebt Uses ReturnonAssets ROA ReturnonEquity ROE NetIncome Assets ROE NetIncome Equity Profitabilityofequityinvestedinbusiness netequityissuedplusretainedearnings Returnsofenterpriseasawhole Returnstoshareholders Framework AccountingBusinessMetrics TheDuPontformulaisusedtoseparateROEintoitscomponentsinordertoassesstheperformanceofthebusiness ROE NetIncome Equity NetIncome Sales Sales Assets Assets Equity X X ROS AssetTurnover Leverage ROE Profitability AssetTurnover Leverage X X ROA Framework AccountingBusinessMetrics DuPontFormula EVA EVAwithdepreciationaddedback Manyconsultingcompaniesattempttobrandthemodifiedaccountingbusinessmetricstheyuse EconomicProfit Measure ConsultingCompanies BainMcKinseyMarakon throughValue BasedManagement LEK EVA MVA SternStewartATKearneyAccountingfirms BCG HoltBCG CashValueAdded CVA CashFlowReturnonInvestment CFROI Framework ModifiedAccountingBusinessMetrics onlybackward looking Themodifiedaccountingbusinessmetrics whichincludeEP enablerelativelyaccuratelevelsofcorporateperformancemeasurementatlowerlevelsofdecisionmakingintheorganisation AccuracyasMeasureofCorporatePerformance LevelofDecisionMaking High Low Low High MVA ModifiedAccountingBusinessMetrics TSR ROE ROA FundamentalBusinessDrivers EP EVA CFROI RoleinOrganisation Framework Adjustedforallstocksplitsandassumingalldividendsreinvested WhileTSRcalculatesreturntoshareholdersforpublicly listedcompanies BCG sTBRcalculationestimatesequivalentreturnsforprivately heldfirms TotalShareholderReturn TSR inCAGRFormat Marketvalueofshareatendofperiod Marketvalueofshareatbeginningofperiod TotalBusinessReturn TBR Estimatedmarketvalueofsharesofprivately heldcompanyatendofperiod numberofyears 1 numberofyears 1 1 1 Estimatedmarketvalueofsharesofprivately heldcompanyatbeginningofperiod Framework OutputMeasures Bain sclientstockperformanceslideiscalculatedusingTSR whichisusedtomeasuretheshareholdervaluecreated Framework OutputMeasures Agenda ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded MVA EconomicProfit EP CashFlowReturnonInvestment CFROI ExercisesMVAEconomicProfitCaseStudy Diageo MarketValueAdded MVA InvestedCapital GoalofManagersshouldalwaysbetocreatemoreshareholdervalue ormaximiseMVA TotalMarketValueofFirm includesalldebtandequity Bain sfocushasalwaysbeentohelpthemanagementofthefirmtomaximiseshareholdervalue whichisequivalenttomaximisingMVA MarketValueAdded Definition 1of2 MVAequalsthetotalmarketvalueofthecompanylessinvestedcapitalornetassets EithertheOperatingorFinancingApproachcanbeused butBaintypicallyusestheOperatingapproach Note Short termnon interestbearingliabilities OperatingApproach TypicallyusedbyBain FinancingApproach MarketValueAdded Definition 2of2 ThefirststeprequiredtocalculateNetAssetswiththeOperatingApproachistoidentifyexcesscash whichistotalcashlesscashrequiredintheoperatingcycle Note Short termnon interestbearingliabilities Amount MarketValueAdded OperatingApproach ExcessCash Next Theworkingcapitalrequirementsarethefirm snetinvestmentsintheoperatingcycle orthenetamountofshort terminvestmentrequiredtofundoperations Amount WorkingCapitalRequirements MarketValueAdded OperatingApproach WorkingCapitalRequirements WhencalculatingMVA NetFixedAssetsisdefinedasNetPP EplusotherInvestment tangibleandintangible ThethirdandfinalsteptocalculateNetAssetsisNetPP E whichistheamountoflong terminvestmentrequiredtofundoperations Amount NetPP E MarketValueAdded OperatingApproach NetFixedAssets Marketvalueadded MVA reflectsthemarketsexpectationsoftheEPmanagerswilladdinthefuture PercentofTotal MVAisthemarket sexpectationofdiscountedfutureEPs MarketValueAdded LinktoEP AfterextensiveworkbyadiligentBainteam AcmeIndustriesisexpectedtogenerate 25Mineconomicprofitsnextyear whichisexpectedtogrowat3 forever Ifthecostofcapitalis13 andtheinvestedCapitalis 100M whatistheMVAandthemarketvalueofthecompany MarketValueAdded LinktoEP Example AfterextensiveworkbyadiligentBainteam AcmeIndustriesisexpectedtogenerate 25Mineconomicprofitsnextyear whichisexpectedtogrowat3 forever Ifthecostofcapitalis13 andtheinvestedCapitalis 100M whatistheMVAandthemarketvalueofthecompany MVA PVofEPs 25M 13 3 250M MVA InvestedCapital 250M 100M 350M MarketValueoftheCompany MarketValueAdded LinktoEP Solution EPmeasuresmanagers performanceinthepast sinceitrepresentsthemarketvalueaddedcreatedoveroneyear Note AssumesInvestedCapitalConstant MarketValueAdded LinktoEP 1of2 EPisusedtoevaluatemanagerperformancebecausethechangeinMVAoveraperiodoftimeismeasured Goalofcompany smanagersshouldalwaysbetomaximiseMVAWhenmanagersmakeanyinvestmentdecisions iftheprojectis value creatingNPV 0MVAincreasesvalue destroyingNPV 0MVAdecreasesReasonthatEPisthefocusofmostattentionisbecauseMVAisastockorwealthmeasure soMVAwillshowhowmuchvaluehasbeenaddedatthatpointintimeEPmeasurestheamountofvalueaddedoveraperiodoftime whichisfarmoreusefulwhenmeasuringmanagerperformance MarketValueAdded LinktoEP 2of2 WhichUKsectorswouldyouexpecttohavethehighestmarketvalueadded andthelowest WhichUKcompanieswouldyouexpecttohavethehighestmarketvalueadded andthelowest MarketValueAdded ActualPerformance Banks integratedoilanddrugsweretheUKsectorswiththehighestmarketvalueadded Source SternStewart SundayTimes SectorMarketValueAdded Sept98 MarketValueAdded UKSectorPerformance 10Best Distributors printandpackagingandconstructionhadthelowestmarketvalueaddedintheUK Source SternStewart SundayTimes SectorMarketValueAdded Sept98 MarketValueAdded UKSectorPerformance 10Worst Shell s 69 5BofmarketvalueaddedisthelargestintheUK Source SternStewart SundayTimes CompanyMarketValueAdded Sept98 1998EVA B 1 506 0 416 0 803 0 710 0 402 0 024 1 400 0 231 n a 0 098 MarketValueAdded UKCompanyPerformance 10Best BritishSteel s 3BofmarketvaluedestroyedwastheworstofBritain s200largestcompanies Source SternStewart SundayTimes CompanyMarketValueAdded Sept98 1998EVA B 0 071 0 012 0 054 0 087 0 050 0 108 0 120 0 320 0 284 0 352 MarketValueAdded UKCompanyPerformance 10Worst Agenda ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded MVA EconomicProfit EP CashFlowReturnonInvestment CFROI ExercisesMVAEconomicProfitCaseStudy Diageo DefinitionAdvantages DisadvantagesFrameworkUseinStrategyWork EconomicProfit Agenda Definition 1of2 Note EconomicProfit EP OperatingProfit CostofCapital AmountofEquityCapitalInvested EconomicProfit EP isaresidualprofitconceptaccountingfortheopportunitycostofholdingcapital Amount Traditionalaccountingconceptofprofits EconomicProfit Definition 2of2 Note NOPAT NetOperatingProfitAfterTax SeeAppendixfordetails WACC WeightedAverageCostofCapital EconomicProfitdeterminesacompany svaluecreationordestruction Easytouse basedonaccountingrecords forhistoricalvalues NotprisonersofGAAPCanbeusedtoshowrelativeperformanceofproducts segments regions etc inagivenyearCanbecalculatedforfutureyearsanddiscountedtoshowvaluecreationWhenEconomicProfitsarepositiveovertimevaluecreationispositivemarketpricepershareismorethanbookvaluepersharegrowthcreatesvalue EP NOPAT ChargeforCapitalEmployed OperatingProfit EffectiveTaxation InvestedCapital WACC GrossProfit A P NetWorkingCapital NetFixedAssets Overheads EconomicProfit InordertounderstandEPitisimportanttogobacktothebasicincomestatement Whatdidweearn usingwhatweown IncomeStatement Whogetsaccesstotheseearnings 100 100 EBIT PAT Tax Interest Observations Debtprovidershavefirstaccesstotheinterestpaymentsdueonmoneylent Governmentstaxcorporateprofits Shareholders equityproviders haveaccesstoallresidualprofits afterpayinginterestandtax Note EconomicProfit EP OperatingProfit CostofCapital AmountofCapitalInvested KeyPrinciples AccesstoCompanyEarnings EconomicProfit Note NIBL Non interestbearingliabilities Assetsareacompany seconomicresources itemswhichhavethepotentialtoprovidefuturebenefitstotheorganisationNIBLsrepresentafreesourceoffundstothecompany ItismoneylenttoafirmwithnochargeorexpectedreturnDebtisanyinterestbearingcapital includingpreferredstockShareholder sEquityistheaccountant sestimateofthevalueoftheshareholder sinvestmentinthecompanytotalassetslesstotalliabilities KeyObservations BalanceSheetMakeup Whatdoweown Assets NIBLs Debt Shareholder sEquity Howdidwepayforit 500 500 100 BalanceSheet Thebalancesheetseparateswhatisownedbythefirmfromhowitwaspaidfor UnderstandingtheBalanceSheet EconomicProfit EconomicProfitBalanceSheet Note NIBL Non interestbearingliabilities InordertodeveloptheEPbalancesheet short termnon interestbearingliabilitiesmustberemovedandadjustmentsforaccountingdistortionsmustbemade Short termNIBLareremovedfromtheEPbalancesheetsincecapitalreturnsarenotexpectedontheamountsowed e g wagespayable EPBalanceSheetNetAssetsamountmaybemuchlargerthanthetraditionalaccountingvalueafteradjustmentsforaccountingdistortions e g addinginternally generatedintangibleassets aremade RegularBalanceSheet EPBalanceSheet FinancingApproach OperatingApproach EconomicProfit DividendPolicy ThetraditionallinkageoftheIncomeStatementandBalanceSheetistheconnectionbetweennetincomeandretainedearningsordividends Incomeattributabletoshareholders EBIT Interest Tax Cash in fromshareholdersperspective Cash out fromshareholdersperspective NetIncome RetainedEarnings Dividends ManagementDecision ReinvestitintheCompany DistributeittoShareholders IncomeStatementandBalanceSheetTraditionalLink 1of2 EconomicProfit EconomicConsequence ThetraditionallinkageoftheIncomeStatementandBalanceSheetistheconnectionbetweennetincomeandretainedearningsordividends RetainedEarnings NetIncome Dividends Revenue Costs IncomeStatement BalanceSheet Assets Liabilities CurrentAssets NetFixedAssets OtherAssets NIBLs Debt Equity IncomeStatementandBalanceSheetTraditionalLink 2of2 EconomicProfit Ifyoucouldbuythesamefactoryfor 100K butcouldonlyfinance70 withdebtandrequiredequityfortheremaining30 howmuchafter taxprofitwouldyourequiretobreak even assumetaxrate 40 assumecostofequity 15 Break EvenExample 70 Debt 30 EquityRevisited EconomicProfit Ifyoucouldbuythesamefactoryfor 100K butcouldonlyfinance70 withdebtandrequiredequityfortheremaining30 howmuchafter taxprofitwouldyourequiretobreak even assumetaxrate 40 assumecostofequity 15 Debt Equity 70K 7 30 15 1 40 4 9K 7 5K coverinterestpayments coverequitycharge whichisnottax deductible Therefore 12 4Kisrequiredtobreak evenwith30 equity comparedto 7Kwith100 debtfinancingAnyafter taxprofitsbeyond 12 4Kwillbeeconomicprofits 12 4K Break EvenExample 70 Debt 30 Equity Solution EconomicProfit EconomicProfit Agenda DefinitionAdvantages DisadvantagesFrameworkUseinStrategyWork Advantages Source SternStewart EPismoresuccessfulthanothermeasuresinexplainingshareholderreturns TM EconomicProfit Advantages 1of3 AmanagerwithhighROEwillnotundertakeprojectswithROEgreaterthanrequiredbutlowerthancurrentROE creatingmissedopportunities ManagersaretypicallyevaluatedbasedonmaximisingROEAmanagerwithROElevelofRwillnotundertakeanyprojectswithROER0butROE R willstillhavepositiveNPVbutwillnotbeundertakenbymanagercreatesmissedopportunities NPV 0 0 R1 R0 afterequitycharge ROE EP 0 EconomicProfit Advantages 2of3 AmanagerwithlowROEwillundertakeanyprojectthatincreasesROE evenifitisbelowrequiredlevel IfprojectROEisbelowrequiredlevel valueisdestroyed 0 0 Ro AfterequityCharge AmanagerwithROElevelofR2willundertakeanyprojectthatincreasesROEIfanyprojectswithROE Roareundertaken valueisdestroyed NPV R2 EP 0 ROE EconomicProfit Advantages 3of3 Note SomeprojectsmayhavenegativeEPinearlyyearsbutlargepositiveEPinlateryears Toadjustforthis MVA orPVandEPcanbeused ByevaluatingmanagersbasedonEP theirincentiveswillbetofocusonallprojectsthatcreatevalue 0 0 Ro AfterequityCharge ByevaluatingmanagersbasedonEP managerbehaviourcanbealteredsuchthatonlyprojectswithNPV 0areundertaken NPV EP 0Donotundertakeproject EP 0Undertakeproject ROE Econ