This PPT slide, part of the 106-slide Corporate Performance Measurement PowerPoint presentation, presents a framework for corporate performance measurement, specifically focusing on accounting adjustments as outlined by Stern Stewart. It emphasizes the concept of equity equivalent reserves, which enhance the standard accounting book value for common equity. The structure is divided into 2 main sections: Additions to Book Capital and Additions to NOPAT (Net Operating Profit After Tax), each detailing specific adjustments.
In the first section, Additions to Book Capital, various reserves are listed, including Deferred Tax Reserve, LIFO Reserve, and Other Reserves. These adjustments reflect changes in reserves that impact the overall book capital. The inclusion of Cumulative Goodwill Amortisation and Unrecorded Goodwill indicates a focus on intangible assets, which are crucial for understanding the complete financial picture. The mention of (Net) Capitalised Intangibles suggests that these figures are essential for accurately assessing the company's value.
The second section, Additions to NOPAT, outlines how changes in equity equivalents affect operational profitability. It highlights the importance of eliminating goodwill amortisation, which can distort profit figures. The adjustments for (net) capitalised intangibles further clarify how these elements contribute to the financial performance metrics. The slide also discusses cumulative unusual losses or gains after tax, indicating that non-capitalised leases are treated differently, with interest expenses being added back to NOPAT.
Overall, this slide provides a detailed look at how specific accounting adjustments can significantly influence both book capital and operational profitability, offering valuable insights for decision-makers evaluating financial health. Understanding these adjustments is critical for accurate performance measurement and strategic planning.
This slide is part of the Corporate Performance Measurement PowerPoint presentation.
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Performance Management Shareholder Value Strategic Planning Performance Measurement
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