This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
This product (Total Shareholder Return [TSR]) is a 23-slide PPT PowerPoint presentation slide deck (PPT), which you can download immediately upon purchase.
Maximizing shareholder value is the foremost priority for any publicly-owned company; and a top priority for most others. Value Creation is the management philosophy centered around that objective—maximizing of shareholder value. It is both an art and a science.
Value Creation is also independent of industry. In every industry, there are organizations that substantially beat the industry average—and those that lag it.
The most comprehensive and widely accepted measure of Value Creation is Total Shareholder Return (TSR). TSR measures the change in a public company's stock price, in addition to its dividend yield, over a period of time.
This TSR PowerPoint presentation discusses the 3 core drivers to TSR:
1. Changes in Fundamental Value- Fundamental Value represents the discounted value of the future cash flows of our business—based on its margins, asset productivity, cost of capital, and growth.
2. Changes in Investor Expectations – Investor expectations can change our short-term valuation. Investor expectations are measured by a company's expectation premium, which is the different between its actual stock price and the price derived from an analysis of its underlying fundamentals.
3. Distribution of Free Cash Flow – This represents changes in the distribution of free cash flow to investors. The distribution must be decided among dividend yield, share buybacks, and debt repayment.
A successful Value Creation Strategy coordinates the 3 drivers to TSR and manages the tradeoffs among them.
Additional topics discussed include Value Creation Strategy, Total Shareholder Return formula, TSR questions for the CEO, Long-term vs. Short-term Value, Dividends, Revenue Growth, Value Multiple, among others.
This Total Shareholder Return (TSR) presentation also includes slide templates illustrating (1) Total Shareholder Return (TSR) Core Drivers and (2) Value Creation Process. Furthermore, as a fully editable, customizable PPT presentation, you can re-purpose the majority of these Total Shareholder Return slides in your own business presentations.
The presentation offers a detailed breakdown of the Total Shareholder Return (TSR) formula, providing actionable insights for CEOs. It includes templates for illustrating TSR core drivers and the value creation process, making it a versatile tool for business presentations.
Source: Best Practices in Value Creation, Total Shareholder Value PowerPoint Slides: Total Shareholder Return (TSR) PowerPoint (PPT) Presentation Slide Deck, LearnPPT Consulting
This PPT slide presents a clear framework for understanding Total Shareholder Return (TSR) through its 3 primary drivers: changes in fundamental value, shifts in investor expectations, and free cash flow yield. The diagram illustrates how these elements interconnect to derive TSR.
At the center, TSR is depicted as the outcome of the combination of these drivers. Capital gain is highlighted as a key component, indicating that increases in share price directly contribute to shareholder wealth. The slide emphasizes the importance of understanding how changes in fundamental value can influence investor perceptions and expectations, which in turn can affect the overall return.
The inclusion of free cash flow yield suggests that effective cash management strategies, such as dividends, share buybacks, and debt repayment, are critical in maximizing returns. Each of these components plays a role in how investors assess a company's performance and potential for future growth.
The note at the bottom underscores the complexity of value creation, pointing out that managing the interplay among these drivers is essential. This insight is particularly valuable for executives looking to enhance shareholder value. Understanding these dynamics can help in making informed decisions that align with investor interests and market expectations.
This slide serves as a foundational tool for executives aiming to navigate the intricacies of TSR and its implications for strategic planning and financial management. It highlights the necessity for a holistic approach to value creation, ensuring that all aspects of shareholder return are considered in decision-making processes.
This PPT slide presents an overview of Total Shareholder Return (TSR) as a key metric for evaluating value creation in public companies. TSR encompasses changes in stock price along with dividend yields, providing a comprehensive measure of financial performance over time. The slide identifies 3 primary drivers of TSR, each crucial for understanding how value is generated and perceived by investors.
The first driver, "Changes in Fundamental Value," emphasizes the importance of future cash flows, which are discounted based on various factors such as margins, asset productivity, cost of capital, and growth potential. This component underscores the intrinsic value of a company, reflecting its operational efficiency and market positioning.
The second driver, "Changes in Investor Expectations," highlights the psychological aspect of valuation. It notes that investor sentiment can significantly influence short-term stock prices. The expectation premium is introduced here, which is the gap between a company's market price and the value derived from fundamental analysis. This suggests that perceptions and market sentiment can lead to volatility, impacting the overall assessment of a company's worth.
The third driver, "Distribution of Free Cash Flow," addresses how companies allocate their available cash to shareholders. This includes decisions regarding dividends, share buybacks, and debt repayment. The effective management of free cash flow is critical, as it directly affects investor satisfaction and long-term loyalty.
Overall, the slide effectively communicates the multifaceted nature of TSR, making it clear that understanding these drivers is essential for any executive looking to enhance shareholder value.
This PPT slide outlines a structured approach to managing the Value Creation Process, emphasizing the integration of 3 essential dimensions that influence Total Shareholder Return (TSR). The first dimension focuses on managing Fundamental Value for long-term sustainability. It highlights the necessity for management to devise a comprehensive plan aimed at enhancing this value over an extended period. This approach ensures that the organization remains viable and competitive in the long run.
The second dimension addresses the management of Investor Expectations for short-term value. This section stresses the importance of understanding how investors perceive the organization’s performance in the near term. It suggests that aligning management strategies with investor expectations can facilitate better communication and potentially enhance investor confidence.
The final dimension involves managing Free Cash Flow Yield. This part of the slide underscores the need for clear prioritization regarding the allocation of generated cash. It prompts management to consider how much cash should be retained, reinvested, or distributed to investors and debt holders. This decision-making process is critical for maintaining financial health and satisfying stakeholder demands.
A key takeaway from the slide is the interconnectedness of these 3 dimensions. The text emphasizes that all steps must be coordinated, as changes in one area can significantly impact the others. This holistic view is crucial for executives aiming to optimize value creation while balancing short-term pressures with long-term goals. Understanding this integrated approach can guide strategic decisions that enhance overall organizational performance.
This PPT slide presents a series of probing questions aimed at CEOs, focusing on the development of a comprehensive value creation strategy. It emphasizes the importance of understanding the historical context of Total Shareholder Return (TSR) and how it has evolved over time. The first question prompts CEOs to reflect on the historical sources of their company's TSR, highlighting the need for a deep understanding of past performance as a foundation for future strategies.
Subsequent questions delve into the future implications of current plans, urging leaders to assess whether their strategies are defensible in light of industry dynamics. This inquiry is critical as it connects current actions with anticipated outcomes, ensuring alignment with overarching objectives. The slide also addresses market expectations, encouraging CEOs to evaluate if there’s a disconnect between what the company can deliver and what investors expect, which is crucial for maintaining investor confidence.
Valuation multiples are another focal point, with questions aimed at understanding what drives these metrics in relation to industry peers. This aspect is vital for positioning the company effectively within its sector. The slide further explores trade-offs between enhancing fundamental value and managing cash flow distribution, a balancing act that requires strategic foresight.
Finally, the slide prompts consideration of investor priorities, emphasizing the need for alignment between management strategies and investor expectations. This comprehensive approach ensures that CEOs are equipped to navigate complex market conditions while driving value creation.
Overall, the slide serves as a strategic tool for CEOs to critically evaluate their current and future value creation strategies, ensuring they are well-prepared to meet both market and investor demands.
This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
For $10.00 more, you can download this document plus 2 more FlevyPro documents. That's just $13 each.
ABOUT FLEVYPRO
This document is part of the FlevyPro Library, a curated knowledge base of documents for our FlevyPro subscribers.
FlevyPro is a subscription service for on-demand business frameworks and analysis tools. FlevyPro subscribers receive access to an exclusive library of curated business documents—business framework primers, presentation templates, Lean Six Sigma tools, and more—among other exclusive benefits.
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.
Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
Read Customer Testimonials
"As a young consulting firm, requests for input from clients vary and it's sometimes impossible to provide expert solutions across a broad spectrum of requirements. That was before I discovered Flevy.com.
Through subscription to this invaluable site of a plethora of topics that are key and crucial to consulting, I
have been able to exceed expectations and deliver quality advice and solutions to my clients. The quality and expertise of the authors are exemplary and gives me great confidence to use as part of my service offerings.
I highly recommend this company for any consultant wanting to apply international best practice standards in their service offerings.
"
– Nishi Singh, Strategist and MD at NSP Consultants
"Flevy.com has proven to be an invaluable resource library to our Independent Management Consultancy, supporting and enabling us to better serve our enterprise clients.
The value derived from our [FlevyPro] subscription in terms of the business it has helped to gain far exceeds the investment made, making a subscription a no-brainer for any growing consultancy – or in-house strategy team."
– Dean Carlton, Chief Transformation Officer, Global Village Transformations Pty Ltd.
"The wide selection of frameworks is very useful to me as an independent consultant. In fact, it rivals what I had at my disposal at Big 4 Consulting firms in terms of efficacy and organization."
– Julia T., Consulting Firm Owner (Former Manager at Deloitte and Capgemini)
"Flevy is our 'go to' resource for management material, at an affordable cost. The Flevy library is comprehensive and the content deep, and typically provides a great foundation for us to further develop and tailor our own service offer."
– Chris McCann, Founder at Resilient.World
"Flevy is now a part of my business routine. I visit Flevy at least 3 times each month.
Flevy has become my preferred learning source, because what it provides is practical, current, and useful in this era where the business world is being rewritten.
many challenges and there is the need to make the right decisions in a short time, with so much scattered information, we are fortunate to have Flevy. Flevy investigates, selects, and puts at our disposal the best of the best to help us be successful in our work.
"
– Omar Hernán Montes Parra, CEO at Quantum SFE
"I have used Flevy services for a number of years and have never, ever been disappointed. As a matter of fact, David and his team continue, time after time, to impress me with their willingness to assist and in the real sense of the word. I have concluded in fact
that it is not at all just a repository of documents/resources but, in the way that David and his team manage the firm, it is like dealing with consultants always ready to assist, advise and direct you to what you really need, and they always get it right.
I am an international hospitality accomplished senior executive who has worked and lived during the past 35 years in 23 countries in 5 continents and I can humbly say that I know what customer service is, trust me.
Aside from the great and professional service that Flevy's team provide, their wide variety of material is of utmost great quality, professionally put together and most current.
Well done Flevy, keep up the great work and I look forward to continue working with you in the future and to recommend you to a variety of colleagues around the world.
"
– Roberto Pelliccia, Senior Executive in International Hospitality
"Last Sunday morning, I was diligently working on an important presentation for a client and found myself in need of additional content and suitable templates for various types of graphics. Flevy.com proved to be a treasure trove for both content and design at a reasonable price, considering the time I
saved. I encountered a download issue during the ordering process. However, a quick email to Flevy's support team, even on a Sunday (!!!), resulted in assistance within less than an hour, allowing me to download the content I needed. Fantastic job, Flevy! I give 5 stars for both content/price and customer service. Thank you!
"
– M. E., Chief Commercial Officer, International Logistics Service Provider
"As a consultant requiring up to date and professional material that will be of value and use to my clients, I find Flevy a very reliable resource.
The variety and quality of material available through Flevy offers a very useful and commanding source for information. Using Flevy saves me time, enhances my expertise and ends up being a good decision."
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.
Click main image to view in full screen.
