How much profit is enough? Answering this question requires an understanding of how much risk is being taken and what the market requires of investments of similar risk. Learn why GAAP accounting measures can lead you astray when trying to evaluate the true economic performance of an enterprise. The measurement of economic costs and revenues requires the inclusion of opportunity costs that GAAP does not measure. The seminar looks at how this required return is established and provides practical guidance regarding two state of the art techniques for measuring true economic profit.
DESIGNED FOR
Professionals interested in learning about enhanced metrics to enhance the organization. CEOs, Corporate Financial Leaders, business owners, Corporate Financial Managers, entrepreneurs, CFOs, Controllers, CPAs, Accountants, Board members, advisors
BENEFITS
After attending this course, you will be able to:
- Determine the weaknesses of GAAP as a financial performance measure
- Select alternative approaches
HIGHLIGHTS
The major topics covered in this class include:
- Why EPS, ROS, ROA and ROCE fail
- Thinking like an economist
- What is the cost of capital?
- Going beyond the weighted average cost of capital (WACC) to its fundamental principles
- The importance of asset utilization
- Economic value added as a performance measure
- Latest developments in EVA; EVA margin, EVA Momentum and Residual Cash Earnings
COURSE LEVEL
Intermediate
PREREQUISITES
At least six (6) months of professional financial statement analysis experience, or at least six (6) credit hours of corporate finance classwork at an accredited university.
ADVANCE PREPARATION
None