Identifying the value dynamic within a business or market is critically important as it is the clearest indicator of wealth generation or destruction. Many businesses and markets quietly destroy capital and thus value without being noticed. Why? In the main, the capital markets are driven by an earnings perspective, not by a total economic perspective. Unfortunately, an earnings-driven perspective delivers a view that does not account for the cost of capital nor indeed for the impact of taxation in totality in the majority of cases. Think Enron and its fixation on Earnings Per Share growth whilst the company's underlying economic and capital position was simultaneously eroded. Our role is to assist companies understand the value dynamic within their market(s) and to help them understand their own value performance relative to their peers. We also offer strategic solutions to those entities that wish to make the transition from a position of value destruction to that of value creation.
We undertake a thorough economic analysis of the business (and peers) to determine the true wealth/value dynamic at a company and market-level.
We identify the areas of the business that are creating value and those which are destroying value. We determine the reasons for good and not so good economic performance eg assessing the cost of revenue against the economic return, identifying the effect of disposals and acquisitions on the value creation dynamic and measuring the economic efficiency of the business using our proprietary indexing capabilities.
We assist and advise in the re-shaping of corporate strategy to focus on value-creation and the generation of shareholder wealth.