Corp Finance 2 SHV

Table of Contents Corporate Finance & Controlling
Course Overview and Topics

1.
Corporate Finance &

International Controlling Context
1. Terminology
2. Organizational Integration
2.
Shareholder Value Analysis

1.
Shareholder Value Approaches
Overview and Comparison
2. Value Added Measurement
3. Balanced Scorecards
4. Integrated Strategic Measures
Cash Planning & Liquidity Management
1. Cash Flow Management
2. Working Capital Management
3. Finance Analysis and Planning
3.
4.
Managerial Accounting (Controlling)

1. Overview
2.
Product Costing Methods
1. Process Costing
2. Activity-based Costing
3. Job-Order Costing
Prof. Dr. Sren Dressler
3.
Special Cost Analysis Methods

1.
Lifecycle Costing
2.
Target Costing
3.
Project Controlling
4.
Value Chain Controlling
5.
Advanced Controlling Topics in international

Corporations
1.
International Harmonization and
Standardization
2.
Transfer Pricing
3.
Profit Center Reporting
4.
Segment Reporting
6.
Corporate Finance
1.
Venture Capital, IPO, and Debt Financing
2.
Capital Markets & Trading
3.
Stocks and Stock Evaluation
4.
Technical Trading
5.
Option Trading
Corporate Finance
Shareholder Value in the overall economic context
Market are continuously moving around an equilibrium
Researchers such as Schumpeter and Kondratieff
perceive this as normal and positive due to increased
innovation activities in downtimes
Also, increased M&A activities eliminate redundancies
and leads to stronger performance of the companies
Overall, cyclicity is a necessity in business life and
wealth building of a society in the long-term
Periods of Shareholder
creation and Shareholder
destruction are alternating
But: how to secure SHV in
the long-term
Development of Global Economy (illustrative)

Long-term creation of
Shareholder Value
Over-Supply
Under-Supply
Oil Crisis 1970s
World War II
Internet Crisis
September 11/Iraq War
2

The Role of institutional Investors
Insights
Investment Volume TIAA-CREF und CalPERS ($ US billions)
Major large-scale institutional investors such

as retirement funds are managing the majority
of assets on international capital markets
Requirement to pay back pensions including
respective interest demands continuous
increase of Shareholder Value
Speculating or even gambling in order to
achieve short-term profit is no option at all for
institutional investors (the Internet crisis has
taught them a lesson)
Todays focus is on profitability as major value
driver with revenue growth as a close second
(= value potential of future periods
Assumptions that share prices and revenue
goals would overcome profitability as value
drivers have been proven wrong
300
TIAA-CREF
CalPERS
250
200
150
100
50
0
1990
1995
2000
2004
TIAA-CREF = Teachers Insurance and Annuity Association College Retirement Equities Fund
CalPERS = California Public Employees Retirement
Case & Homework Assignment

April 16, 2015
Please display the stock price development of the following corporations from 1988 (or respectively the point
in time of going public) until today
UPS
Fedex
American Airlines
Lufthansa
Please discuss the stock price development and highlight specific events
Compare the stock price developments with the development of the Facebook stock price and try to outline a
15 year forecast for the Facebook stock provide a rationale for your assessment
Calculate the market capitalization over time as well for all abovementioned companies and compare and
comment on them
Analyze the S&P 500 Transportation Select Industry Index since its introduction and compare it with the
development of the abovementioned companies.
Identify one stock fund who is outperforming all of the companies and the Transportation Index above
Summarize all of your results and derive and assessment with regards to creation of Shareholder Value
Summarize your experience during the research as well


April 16, 2015
Please display the stock price development of the following corporations from 1988 (or respectively the point
in time of going public) until today
Pfizer
Bristol-Myers Squibb
Baxter
Bayer
Please discuss the stock price development and highlight specific events
Compare the stock price developments with the development of the Google stock price and try to outline a
15 year forecast for the Google stock provide a rationale for your assessment
Calculate the market capitalization over time as well for all abovementioned companies and compare and
comment on them
Analyze the S&P 500 Pharmaceuticals Select Industry Index since its introduction and compare it with
the development of the abovementioned companies.
Identify one stock fund who is outperforming all of the companies and the Pharmaceutical Index above
Summarize all of your results and derive and assessment with regards to creation of Shareholder Value
Summarize your experience during the research as well


Value-based Methods Overview & Summary
Cash Value
Added (CVA)
Discounted
Free Cash
Flows
Economic
Earnings
Cash Flow
Return on
Investment
Discounted
Free Cash
Flows
Market
Capitalization
Market
Capitalization
+ Dividends
Profitability
Measure
Net Operating
Profit After Tax
(NOPAT)
Cash Flow
Cash Flow
(Dividends)
Capital
Investment
Measure
Economic
Book Capital
Invested
Capital
Internal
Internal
Internal
External
External
(internal only
dividends)
Criteria
Leading Metric
Shareholder
Value Creation
Perspective
Economic
Value Added
(EVA)
Market Value
Added (MVA)
Total
Shareholder
Return (TSR)
Attachable to Performance Measurements

Systems

Economic Value Added (EVA)
Basic Principle
Economic Book Capital
Net
Operating
Profit after
Tax
Capital
Charge
WACC
Economic Value Added
Based on modified Accounting

profits
Applies risk premium to
economic capital
Economic profit oriented:
attempts to determine real
economic performance
(= Shareholder Value)
WACC = Weighted Average Cost of Capital


Economic Book Capital Simplified Version
Assets
Equity & Liabl.

Equity
Fixed Assets
Liabilities
Current Assets
Non-interest
bearing Liabl.
Economic Book
Capital (w/o
Adjustments)
=
Capital
Employed
Examples
Accruals for
- Pensions
- Tax
Accounts
Payable

Market Value Added (MVA)
Principle
Market
Value
Economic Book
Capital
Market Value Added

(MVA)
Based on current market

values (Share Price * number
of Shares Outstanding plus
liabilities)
Based on Economic Book
Capital
Values are Market derived
not explicit focus on
Profitability
Has lost importance due to
Internet Crisis
Joel Sterns perspective on MVA & EVA:
http://www.youtube.com/watch?v=ZCaeMTSTWYs

Total Shareholder Return (TSR)
Principle
Dividends
Market
Capitalization
Market
Market
Capitalization
2010
2011
Total Shareholder
Return (TSR)
Based on assumption that

Shareholder Value will be created in
yearly increments only
Starting point is Market Value of the
current year compared with last years
value
Does not include capital base and
subsequently capital costs
Dividends will be added to increase
(or decrease) in value to determine
total Shareholder Return
10

Cash Value Added (CVA)
Cash Flow
Investment
(Acquisition
Values)
Cash Flow
Investment
Basis
CFROI
X
WACC
Cash Value
Added
(CVA)
Principle
Based on Cash Flows and not

Accounting values
Cost of Capital are defined based on
initial investment volumes multiplied
with the WACC
Profitability key driver through Cash
Flow Orientation
Similar Approach to EVA even though
Cash oriented
11

Discounted Free Cash Flow
Principle
Market Value
of Financial
Assets
Company
Value
Market Value
Liabilities
NPV of
Terminal
Value
NPV Free
Cash Flows
Shareholder
Value
Based upon assumption that

Company Value is determined
through Net Present Values of all Free
Cash Flows and NPV of Terminal
Value
Mainly applied to determine Company
Values for evaluation purpose in
acquisition and/or spin-off situations
Complex method to determine Cash
Flows over a certain planning horizon
transaction-oriented method, not
often used for continuous Shareholder
Value assessments
12

Discounted Free Cash Flow
Free Cash Flows
6-
Year
Jahr
Terminal
Endwert Value
NPV
NPV ofdes
Barwerte
Barwert
Terminal
FCFs
EndwertsValue
Principle
Key challenge is long-term

perspective of planning of Free
Cash Flows.
oThe longer the planning
horizon the more inaccurate
are planning assumptions and
objectives
oReliable Cash Flow planning
is possible only if planning
horizon can be reliably
forecasted and planning
assumption wont change
over time
Under going concern
assumption are Free Cash Flows
beyond planning horizon based
on last Free Cash Flow planned
13

April 23, 2015
Assignment questions
Please analyze the stock price development of the

companies on the left over the course of the past ten
years please comment if these stocks would have
been good investments over this time period and
highlight why significant changes in the stock prices
have occurred
Calculate the ROS and ROCE for each of the

companies for the past three years (2012 2014)
Determine the simplified version of the Market Value

Add for these companies
Determine the Total Shareholder Return (TSR) for

the last three years for the same companies (assume
you bought the shares in April 2014, 2013, 2012 and
2011) and calculate the value for the entire corporation
and per stock
Link the development of the results (ROS, ROCE,

MVA, TSR) to the respective stock price development
are there any correlations?
Compare and discuss the results
Which method do you think is most suitable to

measure Shareholder Value please provide a
rationale!
14

April 23, 2015

have occurred



you bought the share exactly one-year ago) and
calculate the value for the entire corporation and per
stock


rationale!
15

April 23, 2015

have occurred



you bought the share exactly one-year ago) and
calculate the value for the entire corporation and per
stock


rationale!
16

Cost of Equity
Capital-market driven
Economic Value Added Approach
Assets
Equity & Liab.

Equity
Fixed Assets
Liabilities
Current Assets
Non-Interest
bearing Liabilities
What is the appropriate return Shareholder can

expect under certain market conditions?
Approach is based on the basic principle that

Shareholders can decide flexible and without time
delay upon their respective investments. Main drivers
of investment decisions are
Return on Capital invested
Risk associated with investment
Attention:
Economic Value Added Approach operates
with a different capital basis than the External
Reporting: Economic Capital Accounting
Capital!
17

Specific Investment Risks according to the Capital Asset Pricing Model:
The Beta-Factor
Basic Principle
The Beta-Factor assigns a companyspecific risk factor in comparison to
an index to each stock
Investors are free to invest in funds or
in specific stocks. Investment decision
in funds allow diversification of risks
but offer lower return perspectives.
Stocks in return are potentially higher
in return but carry higher risks as well
The Beta-Factor was introduced to
quantify company-specific risks
Overall, the Beta-Factor
circumscribes both the market and
liquidity risk
Each publicly listed company carries
its specific Beta-Factor
Stock indices to determine Volatilities

2
Dow Jones
1,8
Stock X
Strong volatilities
1,6
1,4
1,2
1
0,8
0,6
0,4
0,2
0
1994
2000
2004
18

Composition of the DAX
Criteria
Stock Exchange Revenues
Market Capitalization
Weighting
Market Capitalization of
common stocks
Introduced in 1988, indexed with

1,000 points (as of Dec 31,
1987)
Current value:
11.868 points
(April 23, 2015)
Source: Wikipedia
19

Cost of Equity
According to Theory of Capital Markets

multiplied with the
Beta-Factor
According to the Theory

of Capital Markets:
Risk Free Premium
(Starting
point usually
Government
bond return
rate)
High Risk
Investment,
e.g. S&P 500
Risk free
investment, e.g.
Government
Bonds
Cost of Equity
From practical perspective:
Average Interest rate on Liabilities
(means: investor would like to earn at
least the interests paid to loan givers)
Formula
Cost of Equity = (Risk Free Premium + Beta (S&P 500 Return Government Bonds Return))/ (1-t)
t = tax rate; applicable when EBIT (Earnings before Interest and Tax) is used to determine Profits. If Profits are calculated based on NOPAT (Net
Operating Profit after Tax) no tax rate is required in the formula
20

Costs of Equity & Weighted Average Costs of Capital (WACC)
Assets
Fixed
Assets
Equity & Liab.

Equity
Liabilities
Cost of Equity x Percentage Equity
+
(Interests (1-t)) x Percentage Liabilities
Current
Assets
NIBL
=
Weighted Average Costs of Capital
(WACC)
t = tax rate, taxes are deductible from the taxable income

21

Cost of Equity
Formula
Cost of Equity =
(Risk free return + Beta Factor (S&P 500 Return Government Bond Return))/ (1-t)
Usually = Government
Bond Return
In practical application
often used = interests
(in %) granted to loan
givers
( Based on Balance Sheet
and P&L (Liabilities and
Interests)
Simplification:
Interest payments compared
with liabilities in Balance
Sheet leads to average
interest rate of a company)
Calculated by
Investment Banks
Average Return rates of

indices, in US S&P 500
or Dow Jones, in
Available at companies
Germany Dax
(Investor Relations)
compared with
Government Bond
Returns over a period of
12 years
Many stock analysis websites these days offer data on

the Cost of Equity and the WACC calculations, i.e.
www.stock-analysis-on.net
22

EVA Simplified Version
Product Revenues
Revenues
+
Other Revenues
EBIT
COGS
+
Costs
SG&A
+
R&D
ROCE
(Return on
Capital
Employed)
:
Accounts Receivable
+
Current Assets
Economic
Value
Created
Inventories
Others
+
Weighted
Average
Cost of
Capital
Capital
Employed
Fixed Assets
Intangibles
PP&E
+
Financial Assets
Equity
Liabilities
Debt Ratio
Accounts Payable
+
Non-interest
bearing Liabilities
Accruals
+
Others
23

Summary of Formulas
With NOPAT to determine Economic Earnings

Cost of Equity = (Risk Free Rate + Risk Premium(S&P 500 Return Rate Government Bond Return Rate))
= Risk Free Rate + Beta (Market Risk Premium)
With EBIT to determine Economic Earnings

Cost of Equity = (Risk Free Rate + Risk Premium(S&P 500 Return Rate Government Bond Return Rate))
/(1-t)
= (Risk Free Rate + Beta (Market Risk Premium))/(1-t)
WACC = (Percentage Debt * Interest (1-t) + (Percentage Equity * Cost of Equity)
24

Economic Book Capital Build up
Economic
Capital
Adjustments
NIBLs
NonOperating
Assets
Total
Book
Assets
Net Book
Assets
Economic
Capital
Adjustments
Economic
Book
Capital
NIBLs
NonOperating
Assets
Debt
+
Preferred
Stock
Book Value
of Capital
Invested
Book
Equity
Economic Book Capital is generally much greater than

total Book Assets appearing on the Accounting Balance Sheet
25

Elimination of non-interest bearing liabilities and non-operating assets
Add:
Less:
NIBLs
Less:
NIBLs
Total
Book
Assets
Accounts Payable
Selected Other
Current Liabilities
Accrued Expenses
NonOperating
Assets
Non-Operating
Assets
Cash
Investments
Marketable
Securities
Long-Term and
Short-Term
Notes
Receivable
Deferred Tax
Asset
Economic
Capital
Adjustments
Economic Book
Capital
Adjustments
Economic
Book
Capital
R&D Capitalization
Goodwill
Accumulated
Amortization
Capitalized
Operating Leases
LIFO Adjustments
Etc. (See Appendix)
26

Economic Book Capital und NOPAT
Income Statement
Operating
EBIT
+
NOPAT
Adjustments
NOPAT
Provide Parallel Treatment

of Economic Income Statement
and Economic Balance Sheet
Economic
Earnings
Cash Taxes
Economic
Book Capital
Capital
Charge
Provide Full Accountability

of the
Economic Balance Sheet
x
WACC
Balance Sheet
27

Selected Adjustments in the EVA Approach
Converting from
Accounting Life to Economic Life
R&D
Accounting for
Off-Balance Sheet Transactions
Operating leases
Advertising
Recorded goodwill
Classifying
Non-Debt Capital as Debt
Accounting for the

Opportunity Cost of Capital
Pension liabilities
Non-recurring gains and losses
Employee benefit obligations
State inventory at its current value

(adjust from LIFO)
28

Examples for EVA Adjustments Operating Leasing
Basic Principle
EVA Adjustments
Balance Sheet
Operating Leasing differs from

Financial Leasing because it refers
to essential assets that are directly
used to create business value.
Operating Leasing is usually not
capitalized
From an economic perspective is
Operating Leasing seen as regular
assets (PP&E)
According to that are Lease rates to
be replaced by depreciation on the
leased property
Asset, but Off-Balance

transaction
Assets
E&L
FA
CA
+
50 Mill
P&L
Lease Contract 5 Years,
payment p.a. 8 Mill (= NPV
30.5 Mill)
8 Mill 8 Mill
8 Mill 8 Mill
3
Yearly
8 Mill
Elimination of
Lease rates and
replacement by
depreciation on
NPV of leased
Asset
Yearly cost item in P&L

29

Examples for EVA Adjustments R&D Expenses (same principle applies to Advertising)
Basic Principle
R&D is conducted to ensure

revenues in future periods. R&D
expenses are, however, expensed
directly in the P&L of the current
period only.
Focused and highly expensive R&D
activities are tracked in one
respective period only and not
compared with the related revenues
in consecutive periods
From an economic perspective are
R&D expenses equal to investments
and need to be depreciated over the
period of related revenues
EVA Adjustments
Balance Sheet
Investment Value of
R&D Investment
Assets
E&L
FA
CA
2*
P&L
R&D Expenses
R&D Amortization
Investment Value of
R&D Investments =
Total Revenues
past 5 years
Average R&D Expenses

past 5 years
Average Revenues
past 5 years
*) Divided by 2, based on general assumption that only 50% of R&D efforts lead to revenues
30

The EVA Value Tree
Price
Revenues
Volume
EBIT
COGS
Costs
SG&A
Inventories
Others
Accounts
Receivable
NOPAT
Adjustments
NOPAT
Tax
Economic
Earnings
Assets
Economic
Book Capital
PP&E
Investments
Accounts
Payable
Non-interest
bearing Liabl.
Cost of
Capital
Intangibles
(e.g.
Goodwill)
Other NIBL
x
Interest
WACC
Economic
Capital
Adjustments
Cost of
Equity
Debt Ratio
31

Sensitivity Analysis based on the EVA Approach
Revenue
Expenses
Assets
$80.0
Shareholder Value Increase if

selected cost and revenue
drivers change by 5%
$30.0
$31.0
$28.0
$29.0
$27.0
$26.0
$19.0
$12.0
Alcoholic
Beverages
Soft Drinks
Snacks
Mate- Salaries
rial & Wages
Depreciation
Repair
Leasing
$12.0
$8.0
G&A
PP&E
Working
Capital
$7.0
Intangibles
32
Homework Assignment
April 30, 2015
Determine the Economic Value Add for the companies

on the left
For this please research the Cost of Equity and WACC

respectively of each of these firms
Please calculate the EVA for each firm based on the

annual data for 2014 use the simplified version to
determine Economic Book Capital
Research the Profit & Loss statements and Balance

Sheets of the companies in more detail and try to identify
all expenses related to Research & Development
If you do not find any insights please research the 10k and
Appendix (for German companies) for further hints but
please aware do not invest too much time in researching
data: if cannot find any insights please search the internet
or use an assumption (i.e. R&D as % of revenue)
Please calculate the respective R&D adjustments and

make the required changes to the P&L and Balance Sheet
Please plot your results in an EVA value tree displaying

Economic Earnings, NOPAT and Cost of Capital and
highlight the adjustments
Summarize your research results and comment on the

shareholder value of each firm compare the insights
through the EVA to other methods
33
Homework Assignment
April 30, 2015
Determine the Economic Value Add for the companies on

the left
For this please research the Cost of Equity and WACC

respectively of each of these firms
Please calculate the EVA for each firm based on the annual
data for 2014 use the simplified version to determine
Economic Book Capital
Research the Profit & Loss statements and Balance Sheets

of the companies in more detail and try to identify all
expenses related to Advertising (Marketing)
If you do not find any insights please research the 10k and
Appendix (for German companies) for further hints but
please aware do not invest too much time in researching
data: if cannot find any insights please search the internet or
use an assumption (i.e. R&D as % of revenue)
Please calculate the respective Advertising (Marketing)

adjustments and make the required changes to the P&L
and Balance Sheet
Please plot your results in an EVA value tree displaying

Economic Earnings, NOPAT and Cost of Capital and
highlight the adjustments
Summarize your research results and comment on the

shareholder value of each firm compare the insights
through the EVA to other methods
34

Integrated Strategic Measures (ISM)
Value-Based Approach
Strategy-oriented Approach
Financials
Good for planning insufficient
guidance for execution
Good for execution typically lacks

strong analytical validation
Market/
Clients
Operations
Resourcen
Developed by A.T. Kearney in 1997/1998

Implemented with 100+ Companies globally (e.g.. Air France, Office Max, South Korean Telecom)
Integrates value-based-perspective with Strategy focus of Balanced Scorecard
35

Strategy Breakdown and Development of Potential Candidate Measures
Strategic
Objectives
Critical
Success
Factors
Potential
Candidate
Measure
Strategy Breakdown
Visions
36

ISM Strategy Tree - Example
Vision
To be the most
innovative
telecommunications service
provider in
Europe
Functional
Strategy
Objectives
CSF
Potential
Measures
Product
Strategy
Customer
Strategy
Market
Strategy
R&D
Strategy
Operations
Strategy
HR Strategy
37

Measurement Prioritization
Measurement Prioritization
Approach
High
Value Tree
Priority
Measures
Value
Impact
Low
Low
Strategic
Significance
High
Candidates are analyzed with

regard to value creation
potential
Candidates are assessed
towards strategic impact
All existent and new candidates
will be evaluated and ranked
Strategy
Breakdown
38

Measurement Prioritization Table
Criteria
Potential Candidate
Measures
Strategic
Importance
Value Impact
Controllability
Measurability
Prioritization
Revenue with new products
R&D budget/revenue
Market share growth
Revenue growth/industry
growth
Economic Earnings
Cash Flow
COGS reduction
Inventory reduction
Work safety ratio
Training days
5 = Very high 1 = Very low

39

High Priority Measures and Dashboard Categories
Measurement Screening
Approach
Value
Indicator 1
Indicator 2

High
Priority
Measures
Value
Impact
Low
Low
Strategic
Significance
High
Market
Operations
Resources
Indicator 1
Indicator 2

Indicator 1
Indicator 2

Indicator 1
Indicator 2
40

Dashboard Categories and Core Questions
Value
What is our progress

toward achieving our
strategic objectives?
Is the strategy creating
value?
Market
Operations
Are we
Are we managing
effectively
for superior cost,
penetrating our
quality, time and
target markets
flexibility?
and meeting
the needs of
our customers?
Resources
Are we
properly
managing our
tangible and
in-tangible
assets?
41

High Priority Measures and Dashboard Categories
Value
High Priority
Measures
Economic Earnings
Cash Flow
Sales with innovative

Products
Cost Reductions
Error Rates
Training Days
Market
Operations
Resources
42

Cascading of Dashboards
Cascading
Corporate Dashboard
Holding
Alcoholic
Beverages
Sales &
Marketing
Divisional Dashboard
Soft
Drinks
R&D /
Operations
Functional
Dashboard
Starting Point is the

Corporate Dashboard
Dependent on the
chosen organizational
model are the
Divisional or
Functional
Dashboards next
Division/Functional
Dashboards need to
be integrated with the
Corporate one but on
top contain specific
KPIs
43

ISM Dashboard - Example
Finance
Market &
Customer
Product Margins
ROCE
EBIT
Capital Employed
Debt/Equity Ratio
Operations
Resources
Costs of Goods
sold
Quality
Delivery Reliability
Total Productivity
Material Costs
Reduction
Capital
Expenditure Ratio
Employee
Satisfaction
44

Dimensions of the Balanced Scorecard
Financial
Perspective
How do we look to
shareholder?
Customer
Perspective
Internal Business
Perspective
How do customers
see us?
What must we
excel at?
Innovation and
Learning
Can we continue to
improve and
create value?
45
Balanced Scorecard - Example

Perspective
Customer
Perspective
Internal
Business
Perspective
Goals
Measures
Win new key clients
Revenue with target key clients
Reliable delivery
% on-time delivery
Best after sales services
% of solved customer requests
Reduce response time to

customer request
% of immediately solved customer

claims
Continuous cost
improvement
Cost per unit
Operational excellence
% of assembly line outages
Innovation leader
# of new patents
Market success of new

products
Revenue with products introduced in

the last 24 months
Highly skilled workforce
Average training days per employee
Keep pace with market

growth
Revenue growth relative to

competition
Generate Shareholder Value
Economic Value added
Reduce capital intensity
Working Capital
Strategy
Innovation &
Learning
Perspective
Financial
Perspective
46

Basic Principle of a Strategic Map
Mission & Goals

Values
Strategy Dimension
Strategic Capabilities
Change
Creativity
Entrepreneurship
Innovation and Learning

Perspective
Internal Process Optimization
Internal Process
Perspective
Customer Value Optimization
Customer Perspective
Revenue Growth
Strategy
Shareholder Value
Optimization
Productivity
Strategy
Financial Perspective
47

Balanced Scorecard as Management System
Translating the Vision
Clarifying the visions

Gaining consensus
Communicating and
Linking
Communicating and
educating
Setting goals
Linking rewards to
performance measures
Feedback and
Learning
Balanced
Scorecard
Articulating the shared

vision
Supplying strategic
feedback
Facilitating strategy
review and learning
Business Planning
Setting targets
Aligning strategic
initiatives
Allocating resources
Establishing milestones
48

ISM Dashboards - Example
Financials
Market/ Customer
Product
Profitability
ROCE
EBIT
Capital Employed
Debt/Equity Ratio
Processes
COGS
Quality
Delivery
Capabilities
Productivity
Material Cost
Reduction
Resources
Investments
Employee
Satisfaction
49

Corp Finance 2 SHV

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Corp Finance 2 SHV

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Table of Contents Corporate Finance & Controlling

Course Overview and Topics

Corporate Finance &

Shareholder Value Analysis

Managerial Accounting (Controlling)

Prof. Dr. Sren Dressler

Special Cost Analysis Methods

Advanced Controlling Topics in international

Development of Global Economy (illustrative)

Shareholder Value Analysis

Major large-scale institutional investors such

Case & Homework Assignment

Summarize your experience during the research as well

Case & Homework Assignment

Summarize your experience during the research as well

Shareholder Value Analysis

Attachable to Performance Measurements

Shareholder Value Analysis

Economic Value Added

Based on modified Accounting

WACC = Weighted Average Cost of Capital

Shareholder Value Analysis

Equity & Liabl.

Prof. Dr. Sren Dressler

Shareholder Value Analysis

Market Value Added

Based on current market

Joel Sterns perspective on MVA & EVA:

Shareholder Value Analysis

Prof. Dr. Sren Dressler

Based on assumption that

Shareholder Value Analysis

Prof. Dr. Sren Dressler

Based on Cash Flows and not

Shareholder Value Analysis

Prof. Dr. Sren Dressler

Based upon assumption that

Shareholder Value Analysis

Free Cash Flows

Prof. Dr. Sren Dressler

Key challenge is long-term

Case & Homework Assignment

Prof. Dr. Sren Dressler

Please analyze the stock price development of the

Calculate the ROS and ROCE for each of the

Determine the simplified version of the Market Value

Determine the Total Shareholder Return (TSR) for

Link the development of the results (ROS, ROCE,

Compare and discuss the results

Which method do you think is most suitable to

Case & Homework Assignment

Prof. Dr. Sren Dressler

Please analyze the stock price development of the

Calculate the ROS and ROCE for each of the

Determine the simplified version of the Market Value

Determine the Total Shareholder Return (TSR) for

Link the development of the results (ROS, ROCE,

Compare and discuss the results

Which method do you think is most suitable to

Case & Homework Assignment