42 Pages Posted: 23 Feb 2010 Last revised: 14 Mar 2010
Date Written: February 23, 2010
This Powerpoint presentation is focused on the firms' competitive life-cycle framework, also known as the CFROI valuation model. It has evolved as a commercial research program over the past 40 years and today is widely used by institutional money managers.
Slides 1-13 highlight three conceptual pillars to an integrated wealth creation framework: a systems mindset, a knowledge building process, and the firms' competitive life cycle. The life-cycle framework is especially well suited for a proposed Shareholder Value Review to improve corporate governance.
Slides 14-42 focus on eleven valuation ideas that distinguish the research methodology from mainstream finance practices. For example: all variables are expressed in units of constant purchasing power; forward-looking (market derived) discount rates are dependent upon the procedures used to forecast a firm's long-term net cash receipt stream; and a model corporation (Excel spreadsheet) is critical for linking economic performance to accounting data to warranted market valuations.
Keywords: Wealth Creation, Competitive Life Cycle, CFROI, Systems Mindset
JEL Classification: D21, D83, G12, G30, L21, M41
Suggested Citation: Suggested Citation
Madden, Bartley J., Wealth Creation: Powerpoint Presentation of the Firms' Competitive Life-Cycle Framework (February 23, 2010). Available at SSRN: https://ssrn.com/abstract=1557724 or http://dx.doi.org/10.2139/ssrn.1557724