The Corporate Finance Practice has developed a set of proprietary tools and solutions to help our clients drive growth and improve returns.
Corporate Performance Diagnostic (CPD)
A CPD connects a company's performance and growth to future value creation potential, providing a solid basis to opportunely time strategic moves and shareholder communications. It offers a fact-based perspective on the link between a company's valuation in the financial markets and its underlying operational performance, shareholder expectations, and the performance of its peers; and it identifies a company's most promising opportunities to create future value based on rigorous financial analysis, using the core frameworks outlined in our book, Valuation: Measuring and managing the value of companies (Wiley, 2010).
The insights are grounded in four primary work modules:
- Outside-in analyses of publicly available data on a company's performance by business unit, such as return on capital, economic profit, and organic growth as shareholders would see it;
- A comprehensive examination of the link between capital markets data and underlying performance, dissecting shareholder returns to understand the operational factors that drove them (TRS decomposition), disaggregating multiples into core drivers such as expected returns on capital and growth, and analyzing the impact of capital structure, dividends, and payout strategy;
- Business and sector microeconomics, such as profit pool analysis and economic profit decomposition;
- Forward-looking valuation using business-unit level discounted cash flows and/or economic profit, and estimates of future returns to shareholders based on performance assumptions grounded in the industry outlook.
Corporate Performance Analysis Tool (CPAT)
CPAT is a collection of financial analytics tools that perform “big data” financial analyses for more than 65,000 companies at the touch of a button—as well as comprehensive industry classification data (GICs, NAICs, SICs). Built on global coverage of over 50 years of regularly updated corporate performance and macroeconomic data, including over 700 pre-calculated financial performance metrics, the tool also instantly illustrates comparisons across competitor, industry, and geographic peer sets.
While value-oriented management is a common theme at the corporate level, many companies still steer their operating units—a single country, for example—primarily by margin and top-line growth. The Value Navigator uses a single metric to provide transparency on past and future value creation at a granular level, such as a specific category/country combination, based on management's plans, company financials, and market data. The tool’s resource optimizer feature then identifies pockets of opportunity—areas of over-/under-resourcing—and simulates optimal allocation scenarios that promise higher future value creation through value-based performance management, optimized resource allocation, and strategic portfolio moves. This enables CEOs and CFOs to make trade-offs on where to invest, helping them bring the principles of value-based management to the level of operational management, to align the whole company—from the top to individual operating units—for value creation.
Finance 360 is a holistic set of tools and analyses that help companies assess the performance of their finance function. It enables them to identify gaps in their operational efficiency and effectiveness by comparing customer expectations to actual performance and best-in-class organizations, drawing on our experience in diverse companies across industries, geographies, and ownership models. Companies taking the Finance 360 challenge in the past averaged a 20 to 30 percent savings in headcount and other process costs. These companies also developed a deeper understanding of how to transform the finance function and improve their capabilities in overall service to internal customers and speed of execution.
The M&A diagnostic is an in-depth assessment of a company’s existing M&A program and capabilities. Using a combination of interviews and internet-enabled tools, this diagnostic identifies strengths and opportunities for improvement across six dimensions: strategy, governance, M&A organization, sourcing and screening, tools and learning, and integration. It also compares current performance to best practices distilled from interviews and formal diagnostics with leading institutions across the globe, which forms the baseline for improving M&A capabilities.