贝恩－业绩评估1(PPT 106页).ppt

Author:PatrickCote,Contributors:KateMcGreevyJulianCritchlow,bc,CorporatePerformanceMeasurement,April1999,Copyright1999BainInvestedcapital=Alldebtequityinvestedinformatatbookvalue;WACC=WeightedaveragecostofcapitalROIC=Returnoninvestedcapital=(NOPAT/investedcapital)alsoknownas:ReturnonNetAssets(RONA)orReturnonCapitalemployed(ROCE),EPcanbecalculatedbeginningwitheitherprofits,NOPAT,orreturns,ROIC,dependingontheavailabilityofdata.TheNOPATmethodismorecommonlyused,EPCalculation,UsingROIC,UsingNOPAT,EP=NOPAT-CapitalCharge,EP=(ROIC-WACC)*InvestedCapital,Spreadbetweenwhatisachievedandwhatisrequired,InvestedCapital*WACC,DiscountRates-Framework,EconomicProfit,60,CorporatePerformanceMeasurement,*MaybereferredtoasReturnonCapital(ROC)orReturnonInvestment(ROI),Therearetwodifferentframesofreferenceforcalculatingthe“economicvalue”ofanybusiness-analogoustotheperspectivesusedinROIandROEanalysis,TotalCapitalPerspective,EquityCapitalPerspective,BanksandShareholders,Shareholders,EP=NOPAT-(AssetsxWACC),.theprofitabilityofthebusinessfromtheframeofreferenceofthedebtandequityholders,.profitabilityofthebusinessfromtheframeofreferenceoftheequityholders,Opportunitycostofthe(blended)debtandequitycapital,Opportunitycostoftheequitycapital,Profitabilityismeasuredasincomeearnedlesstheopportunitycostoftotalcapitalinvested,Profitabilityismeasuredasincomeearnedlesstheopportunitycostofequitycapitalinvested,Stakeholder:,EPdefinition:,Perspective:,.giventhat,whatistheframeofreference?,Accordingly:,PerformanceMeasurementLinkages:-Ratio:-EP:,TotalCapitalSpread=ROA-WACCEP=TotalCapital*(ROC-WACC),EquityCapitalSpread=ROC-KeEP=EquityCapital*(ROC-Ke),ReturnonAssets(ROA)*,ReturnonEquity(ROE),KeyRatio:,DiscountRates-TwoDifferentDefinitionsofEP,EconomicProfit,61,CorporatePerformanceMeasurement,DiscountRates,Note:*Sinceinvestedcapitaliscalculatedbasedonbookvalueofdebt+equity,WACCcanbecalculatedforEVApurposeswithbookvalueweighting,*Bu=UnleveredBeta=BL1+(1taxrate)(marketvalueofdebtmarketvalueofequity),EconomicProfit,62,CorporatePerformanceMeasurement,EVAandMVAmeasuresdifferfromothermorestandardEconomicProfitandMarket/BookmeasuresprimarilyduetoadjustmentstobookcapitalandearningsadvocatedbyStern/Stewart.,Source:TheQuestforValue,SternStewartsStatedObjective,KeyAdjustments,MakeNOPATamorerealisticmeasureoftheactualcashyieldfromrecurringbusinessactivitiesTurncapitalintoamoreaccuratemeasureofthebaseuponwhichinvestorsexpectreturns,ConvertfromaccrualaccountingtocashaccountingReserves,deferredtaxesConvertfromsuccessfuleffortstofull-costaccountingCumulativeunusualitemsDonotdiscriminatebetweentangibleandintangibleassetsCapitalizeRtheperiod-to-periodchangeflowsthroughtheincomestatement,Note:NOPATisnetofdepreciation;depreciationisconsideredatrueconomicexpensebecauseassetsneedtobereplenishedSource:TheQuestforValue,AdditionstoBookCapital:Equityequivalents,AdditionstoNOPAT:ChangeinEquityEquivalents,DeferredTaxReserveLIFOReserveOtherReservesCumulativeGoodwillAmortisationUnrecordedGoodwill(Net)CapitalisedIntangiblesFull-CostReserveCumulativeUnusualLoss(Gain)afterTax,Increase(decrease)inReserves,EliminateGoodwillAmortisation,Increasein(net)capitalisedintangibles,Increaseinfull-costreserve,Unusualloss(gain)aftertax,Non-capitalisedleasesarecapitalisedandformdebtequivalents;theinterestexpenseisaddedbacktoNOPAT,AccountingAdjustments-SternStewartsMechanics,EconomicProfit,65,CorporatePerformanceMeasurement,Source:INSEAD,IsitlikelytohaveamaterialimpactonEP?Canmanagersinfluencetheoutcome?Canoperatingmanagersunderstandit?Istherequiredinformationrelativelyeasytotrackorderive?Iftheadjustmentismade,willmanagerbehaviourimprove?,Thefollowingfivecriteriashouldbeusedtodeterminewhetheranadjustmentshouldbemade,BasicPrinciple:Eliminatedistortionstotheextentthatitispracticaltodoso,EconomicProfit,AccountingAdjustments-SelectionCriteria,66,CorporatePerformanceMeasurement,Thefollowingshort-cutapproachprovidesaquickmeansofcalculatingEP,butdoesnotincludetheappropriateadjustments,OperatingIncome(EBIT)+InterestIncome+EquityIncome(or-equityloss)+OtherInvestmentIncome-Cashoperatingtaxes-Taxshieldoninterest*=NetOperatingProfitAfterTax(NOPAT)TotalAssets-Short-TermNon-InterestBearingLiabilities(STNIBL)*=InvestedCapital(IC)AverageIC=(ICBeginning+ICEnd)2Note:SometimesICBeginning,notICAverageusedNOPAT-CapitalCharges(AverageIC*CostofCapital)=EP,*Operatingincomexmarginalstatutorytaxrate(givesnocreditfortaxshieldoninterest)*STNIBL=Currentliabilitieslessallinterestbearingliabilities,suchasshort-termnotespayableSource:INSEAD,EconomicProfit,Short-CutApproach(ExcludesAdjustments),67,CorporatePerformanceMeasurement,Agenda,EconomicProfit,DefinitionAdvantages/DisadvantagesFrameworkUseinStrategyWork,68,CorporatePerformanceMeasurement,UseinStrategyWork,EPworkseffectivelyformanufacturingcompanies,butisgenerallynotappropriateforservicefirms,ManufacturingSector,ServiceSector,UseofEP/MVA,Capital-intensiveindustriesbenefitmostfromEPforcesmanagerstoconsidercapitalinvestedinbusinesse.g.Coca-ColaspinningoffbottlersUDVspinningoffwineproductionassetstofocusonblending,EPgenerallynotappropriateduetodifficultyinmeasuringhumancapital(typicallymostvaluableasset)StructureofbalancesheetprecludesuseofEPinFinancialServicessector,EconomicProfit,69,CorporatePerformanceMeasurement,Anorganisationneedstoestablishtheoptimumlevelofinformationcomplexityinordertocreatethemostvalue,Optimumlevelofadjustmentandanalysiswillbedeterminedby:,AbsolutesensitivityofvaluemeasurestoadjustmentsLeveloftheorganisationthatisusingthe(economicvalueadded)informationStrategicuseofinformationAbilityofmanagementtomakedecisionsontheinformation,ValuetotheOrganisation*,LevelofComplexity(AdjustmentandAnalysis),OptimalAdjustmentsandAnalysis,Organisationbelowfullpotentialasaresultoftoosimplisticameasurement/decisionmakingprocess,Diminishingvaluetoorganisationascostofadjustment/analysisOutweighsincrementalgainondecisionsmade,Maximumvaluetoorganisationfromeconomicvalue-added,Note:Valuedefinedasincrementalvaluecreatedfrommanagementdecisionlesscostoftheinformationbase/decionmakingprocess,EconomicProfit,OptimumInformationLevel,70,CorporatePerformanceMeasurement,UseinStrategyWork,EPcanbeimprovedinanumberofways,ImprovingEP,Achievingeconomicallyprofitablegrowth,Exitinguneconomicactivities,Raisingtheefficiencyofcurrentoperations,GeneratingincrementalgainsinEPfromexistingcapitalinvestments,GeneratingincrementalpositiveEPsfromnewcapitalinvestments,Immediateexitfromactivitiesgeneratesproceedssubsequentcashflowforegone,EconomicProfit,71,CorporatePerformanceMeasurement,ThefollowingguidelinesshouldbeconsideredwhensettingupEP,LinktoCompensation,KeepitSimple,SeniorManagersshouldbebothevaluatedandcompensatedbasedontheirEPresultsAlignsincentivesofShareholdersandManagementUsechangeinEPasbasisforevaluationtoincentmanagerstocreateadditionalvalue,ThemorecomplextheEPsystemis,thelesslikelyitistobeusedAccountingadjustmentsmustbesufficienttoeliminatemajordistortionsfromeconomicvalue,butnottoocomplicatedformanagementtounderstandorutiliseonlong-termbasis,EconomicProfit,Guidelines,72,CorporatePerformanceMeasurement,Agenda,ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded(MVA)EconomicProfit(EP)CashFlowReturnonInvestment(CFROI)ExercisesMVAEconomicProfitCaseStudy-Diageo,73,CorporatePerformanceMeasurement,CashFlowReturnonInvestment(CFROI),alsoknownastheHoltmethod,isareturnoninvestmentmeasurethatadjustsfordeficiencyintypicalIRRcalculationsCFROIusescashflowsandinvestmentsstatedinconstantmonetaryunitsOncecalculated,CFROIcomparedtobenchmark,thefirmscostofcapitaltoevaluatemanagementperformanceTwofirmsusetheHoltMethodHoltValueAssociates,LPforportfoliomanagementBCG/HoltforCorporateManagement,CFROIisanadjustedIRRthatiscomparedtothefirmsWACC,CFROI,Definition,74,CorporatePerformanceMeasurement,DetermineaveragelifeoffirmsassetsApproximatebymedianofGrossPlantDepreciationExpenseoverlast3years,CalculateLifeofAssets,CalculateGrossCashInvestment,CalculateSumofNonDepreciatingAssets,CalculateCFROI,CalculateGrossCashFlow,CompareCFROItoBenchmark,CashFlowReturnonInvestment-CFROIFramework(1of6),CFROI,75,CorporatePerformanceMeasurement,StartwithNetIncome(aftertaxes)AddbacknoncashoperatingexpensesAddbackfinancingexpensesUsemonetaryinflationadjustmenttorestateincurrentdollars,CalculateLifeofAssets,CalculateGrossCashInvestment,CalculateSumofNonDepreciatingAssets,CalculateCFROI,CalculateGrossCashFlow,CompareCFROItoBenchmark,CashFlowReturnonInvestment-CFROIFramework(2of6),CFROI,76,CorporatePerformanceMeasurement,GrossupbookassetswithaccumulateddepreciationofvalueofoperatingbasesDiscountoperatingleasesoverlifeofassetsperiodusingrealrateofinterestoffirmsdebt,CalculateLifeofAssets,CalculateGrossCashInvestment,CalculateSumofNonDepreciatingAssets,CalculateCFROI,CalculateGrossCashFlow,CompareCFROItoBenchmark,CashFlowReturnonInvestment-CFROIFramework(3of6),CFROI,77,CorporatePerformanceMeasurement,Terminalvalueconsistsofnondepreciatingassets,including:landnetworkingcapitalinvestmentsinmarketablesecuritiesUseinflationadjustmenttorestateincurrentdollars,CalculateLifeofAssets,CalculateGrossCashInvestment,CalculateSumofNonDepreciatingAssets,CalculateCFROI,CalculateGrossCashFlow,CompareCFROItoBenchmark,CashFlowReturnonInvestment-CFROIFramework(4of6),CFROI,78,CorporatePerformanceMeasurement,CalculateCFROIusingIRRmethodology:PresentValue=GrossCashInvestmentPayments=GrossCashFlowFutureValue=SumofNondepreciatingassetsNumberofPeriods=LifeofAssets,CalculateLifeofAssets,CalculateGrossCashInvestment,CalculateSumofNonDepreciatingAssets,CalculateCFROI,CalculateGrossCashFlow,CompareCFROItoBenchmark,CashFlowReturnonInvestment-CFROIFramework(5of6),CFROI,79,CorporatePerformanceMeasurement,Usefirmscostofcapital(WACC)forbenchmarkMustrestateWACCinrealtermstobeabletocomparetoCFROI,CashFlowReturnonInvestment-CFROIFramework(6of6),CFROI,80,CorporatePerformanceMeasurement,EP,CalculateLifeofAssets,CalculateGrossCashInvestment,CalculateSumofNonDepreciatingAssets,CalculateCFROI,CalculateGrossCashFlow,CompareCFROItoBenchmark,AddbackgoodwillamortisationAdjusttaxexpensetoactualcashtaxesAddbackinterestportionofoperatingrentalexpenses,AddbackaccumulatedgoodwillOnlyuseassetsnetofdepreciation,WACCinnominalterms,TargetAudience,Methodology,ManagementExternalInvestors,NPV,CashFlowReturnonInvestment-EP/CFROIDifferences(1of2),CFROI,81,CorporatePerformanceMeasurement,CFROI,CalculateLifeofAssets,CalculateGrossCashInvestment,CalculateSumofNonDepreciatingAssets,CalculateCFROI,CalculateGrossCashFlow,CompareCFROItoBenchmark,Addbackgoodwillamortisation+depreciationNotaxexpenseadjustmentAddbackoperatingrentalexpenses,AccumulatedgoodwillisnormallynotaddedbackAssetsgrossedupforaccumulateddepreciation,WACCrestatedinrealterms,TargetAudience,Methodology,ExternalInvestors,IRR,CashFlowReturnonInvestment-EP/CFROIDifferences(2of2),CFROI,82,CorporatePerformanceMeasurement,Agenda,ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded(MVA)EconomicProfit(EP)CashFlowReturnonInvestment(CFROI)ExercisesMVAEconomicProfitCaseStudy-Diageo,83,CorporatePerformanceMeasurement,Source:Harnischfegers1996AnnualReport,INSEAD,47,598,340commonsharesoutstandingMarketValueofcommonshares:$40SinceMarketValueofdebtandminorityinterestnotreportedassumemarketvalue=bookvalueAssumeoperatingcashequalto1%oftotalsales,InformationRequired:,Exercise:,CalculateHarnischfegersMVAatOctober31,1996,MVAExercise,MarketValueAddedExercise(1of3),84,CorporatePerformanceMeasurement,Source:Harnischfegers1996AnnualReport,INSEAD,Dollarsamountsinthousands,1996,1995,Assets,CurrentAssets,Cashandcashequivalents,36,936,239,043,Accountsreceivablenet,667,786,499,953,Inventories,547,115,416,395,Businessheldforsale,26,152,-,Othercurrentassets,132,26,57,999,1,410,250,1,213,390,Property,plantandequipment,Landandimprovements,48,371,31,571,Buildings,301,010,233,788,Machineryandequipment,776,332,676,546,1,125,713,941,905,Accumulateddepreciation,(491,668),(454,249),634,045,487,656,Investmentsandotherassets,Goodwill,512,693,147,943,Intangibleassets,39,173,66,796,Otherassets,93,868,124,982,645,734,339,721,$2,690,029,$2,040,767,HarnischfegerIndustriesInc.ConsolidatedBalanceSheet-YearEnded31October1996,MarketValueAddedExercise(2of3),MVAExercise,85,CorporatePerformanceMeasurement,Source:Harnischfegers1996AnnualReport,INSEAD,HarnischfegerIndustriesInc.ConsolidatedBalanceSheet-YearEnded31October1996,LiabilitiesandShareholdersEquity,CurrentLiabilities:,Short-termnotespayable,49,633,22,802,Tradeaccountspayable,346,056,263,750,Employeecompensationandbenefits,160,488,100,041,Advancepaymentsandprogressbillings,155,199,154,401,Accruedwarranties,50,718,43,801,1,077,127,723,303,Long-termobligations,657,765,459,110,Liabilityforpostretirementbenefits,78,814,101,605,Accruedpensionandrelatedcosts,39,902,52,237,Otherliabilities,14,364,20,820,Deferredincometaxes,54,920,34,805,MinorityInterest,188,000,209,467,ShareholdersEquity:,93,652,89,611,Commonstock,51,407,51,118,Capitalinexcessofparvalue,615,089,603,712,Retainedearnings,148,175,53,560,Cumulativetranslationadjustments,(37,584),(42,188),Less:StockEmployeeCompensationTrustTreasuryStock,(42,242),(46,513),673,485,559,276,$,2,690,029,2,040,767,(61,350),(60,483),OtherLiabilities:,Othercurrentliabilities,315,033,138,508,MarketValueAddedExercise(3of3),MVAExercise,86,CorporatePerformanceMeasurement,Harmishfegersmarketvalueat31October,1996was$2,704.984M,MarketValue($M),MarketValueAdded-Solution(MarketValue),MVAExercise,87,CorporatePerformanceMeasurement,HarnishfegersexcesscashatOctober31,1996was$8,296M,Amount($K),MarketValueAdded-Solution(ExcessCash),MVAExercise,88,CorporatePerformanceMeasurement,HarnischfegersworkingcapitalrequirementsatOctober31,1996were$374.46M,Amount($K),WorkingCapitalRequirements,MarketValueAdded-Solution(WorkingCapitalRequirements),MVAExercise,89,CorporatePerformanceMeasurement,HarnischfegersnetfixedassetsatOctober31,1996were$1.28B,Amount($Thousands),NetPPINSEAD,HarnischfegerIndustriesInc.ConsolidatedBalanceSheet-YearEnded31October1996,EconomicProfitExercise,CurrentAssets:,Othercurrentassets,Businessheldforsale,Inventories,Accountsreceivable-net,Cashandcashequivalents,1,213,390,57,999,-,416,395,499,953,$239,043,1,410,250,132,261,26,152,547,115,667,786,$36,936,Otherassets,Intangibleassets,Goodwill,EPExercise,95,CorporatePerformanceMeasurement,Source:Harnischfegers1996AnnualReport;INSEAD,LiabilitiesandShareholdersEquity,1996,1995$22,802263,750100,041154,40143,801138,508723,303459,110,Long-termObligations,78,814,101,60552,23720,82034,805209,46789,611,MinorityInterest,51,118603,71253,560(42,118(60,483(46,513559,276$2,040,767,),HarnischfegerIndustriesInc.ConsolidatedBalanceSheet-YearEnded31October1996,EconomicProfitExercise,Othercurrentliabilities,Accruedwarranties,Advancepaymentsandprogressbillings,Employeecompensationandbenefits,Tradeaccountspayable,Short-termnotespayable,CurrentLiabilities:,657,765,1,077,127,315,033,50,718,155,199,160,488,346,056,$49,633,Deferredincometaxes,Otherliabilities,Accruedpensionandrelatedcosts,Liabilityforpost-retirementbenefits,OtherLiabilities:,93,652,188,000,54,920,14,364,39,902,TreasuryStock,Less:StockEmployeeCompensationTrust,Cumulativetranslationadjustments,Retainedearnings,Capitalinexcessofparvalue,Commonstock,ShareholdersEquity:,$2,690,029,673,485,(42,242),(61,360),(37,584),148,175,615,089,51,407,EPExercise,96,CorporatePerformanceMeasurement,DollaramountsinthousandsSalesCostofSalesProductDevelopment,SellingandAdministrationExpensesRestructuringCharge,$2,887,5702,166,775433,77643,000,OperatingIncomeInterestExpense-Net,244,019(62,258),IncomebeforeTaxesandMinorityInterestProvisionforIncomeTaxesMinorityInterest,181,761(63,600)(3,944),Source:Harnischfegers1996AnnualReport;INSEAD,NetIncome,$114,217,HarnischfegerIndustriesInc.ConsolidatedBalanceSheet-YearEnded31October1996,EconomicProfitExercise,EPExercise,97,CorporatePerformanceMeasurement,63.600181.761,Harnischfegers1996NOPATwas$162.857M,OperatingIncome+InterestIncome+EquityIncome+OtherInvestmentIncome-IncomeTaxes-Taxshieldoninterest*=NetOperatingProfitAfterTax(NOPAT),*Taxshieldoninterest=,$244.0196.50500(63.600)(24.067)$162.857,$M,ProvisionforincometaxesIncomebeforetaxesandminorityinterest,NetInterestExpense+InterestIncome,62.258+6.505,24.067,x,=,x,=,EconomicProfit-ExerciseSolution,EPExercise,98,CorporatePerformanceMeasurement,Harnischfegers1996averageInvestedCapitalwas$1,501.40M,TotalAssets-STNIBL*=InvestedCapital,2,690.029(1,027.494)1,662.535,2,040.767(700.501)1,340.266,*STNIBL=CurrentLiabilities-Short-TermNotesPayable=,1,077.127(49.633)1,027.494,723.303(22.802)700.501,1996,1995,1996,1995,$M,AverageInvestedCapital,1,501.401,EconomicProfit-ExerciseSolution,EPExercise,99,CorporatePerformanceMeasurement,Harnischfegers1996EPwas($17.311M),NOPAT-CapitalCharges*EP,Note:*CapitalCharges=AverageIC*WACC=1,501.401x12%=180.168,162.857(180.168)(17.311),$M,Harnischfegerwasapproximatelyvalue-neutralin1996,whichcontrastssharplywiththe$1billionMVA(seeMVAsection).Thediscrepancyindicatesthatdespiteaddingnovaluein1996,themarketexpectsmanagementtodelivervalueinthefuture.ThelargeMVAimpliesthatfutureEPswillbemuchhigherthan1996.,EconomicProfitExerciseSolution,EPExercise,100,CorporatePerformanceMeasurement,Agenda,ExecutiveSummaryObjectivesBackgroundPerformanceMeasurementFrameworkMarketValueAdded(MVA)EconomicProfit(EP)CashFlowReturnonInvestment(CFROI)ExercisesMVAEconomicProfitCaseStudy-Diageo,101,CorporatePerformanceMeasurement,Lowergrapecostspurchasingonspotmarketlong-termcontractualsupplycontractsBlendingtechniquesusedtoensureconsistentquality,ThesuccessofNewWorldwineproducerscanbeattributedtothreeinitiatives,ofwhichthereductionincapitalintensitywasmostcloselylinkedtotheEPanalysis,DecreasedImportanceofAppellation,ReductioninCapitalIntensity,PremiumPositioningandVarietalDominance,NewWorldWine