This PPT slide, part of the 106-slide Corporate Performance Measurement PowerPoint presentation, presents a framework for corporate performance measurement, specifically focusing on the Total Shareholder Return (TSR) and its application to privately-held firms through BCG's Total Business Return (TBR) calculation. It highlights the fundamental difference between TSR, which is tailored for publicly-listed companies, and TBR, which aims to provide a comparable metric for private entities.
The slide outlines the formula for calculating TSR, emphasizing the relationship between the market value of shares at the end and beginning of a specified period. This is expressed in a compound annual growth rate (CAGR) format, which allows for a clear understanding of shareholder returns over time. The visual representation of the formula indicates that the market value at the end of the period is divided by the market value at the beginning, adjusted for the number of years involved.
In parallel, the slide introduces the TBR calculation for privately-held firms. It suggests that the estimated market value of shares for these companies can be derived similarly to TSR, using a comparable formula. The emphasis on estimating market value indicates a nuanced approach to performance measurement, recognizing the unique challenges faced by private firms in valuation.
Key takeaways include the importance of adapting performance metrics to suit different types of companies and the need for accurate valuation methods in assessing shareholder returns. This framework provides a structured approach for executives to evaluate their performance relative to both public and private benchmarks, enhancing strategic decision-making. Understanding these metrics can lead to more informed investment and operational strategies.
This slide is part of the Corporate Performance Measurement PowerPoint presentation.
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