Shareholder value tool
First Claim
1. A computer-based system for automated performance evaluation of an organization, the system comprising:
- a processor;
a computerized database storing financial information on the organization;
computer-readable medium encoding instructions for automated performance evaluation in light of the financial information in said database; and
communication means connecting said processor, said database and said computer-readable medium;
wherein said instructions in said medium include;
1) an investment return evaluation module, said investment return evaluation module receiving the financial information from said communication means and calculating a return on invested capital;
2) an organization β
value determination module, said organization β
value determination module determining a β
value of the organization by (1) identifying comparable businesses that operate in the same field as the organization, (2) determining the β
values of the comparable businesses, (3) averaging the β
values of the comparable businesses to determine an unlevered β
value, (4) estimating an effect of the financing structure of the organization using the unlevered β
value, and (5) determining a relevered β
value for the organization by adding in the estimated effect of the financing structure;
3) an investment costs evaluation module, said investment costs evaluation module receiving the financial information from said communication means and calculating a weighted average cost of capital using said β
value;
4) a growth estimation module, said growth estimation module receiving the financial information from said communication means and calculating organic growth and growth through mergers and acquisitions, said growth through mergers and acquisitions being calculated by comparing the performance of the organization to the size or book value of the organization and assessing the organization using acquirer and non-acquirer strategies;
5) an economic performance calculation module, said economic performance calculation module calculating a total return to shareholders using the calculated return on invested capital, the calculated weighted average cost of capital, and the calculated growth;
6) a value determination module, said value determination module determining value drivers for the organization using the calculated total return to shareholders; and
7) a target capital structure development module, the target capital structure development module (1) estimating a current capital structure of the organization by identifying financing values associated with the organization, converting the financing values to market values, and calculating a market-based capital structure, (2) reviewing comparable businesses of the organization, and (3) reviewing a management approach of the organization.
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Accused Products
Abstract
The present invention provides and system and related method for automatically examining a company'"'"'s financial data and evaluating factors affecting the company'"'"'s stock value. Specifically, the present invention evaluates a company'"'"'s spread through that company'"'"'s debt and equity costs. The present invention further measures returns to investors from company growth, either organic growth or growth through Mergers and acquisitions. The present invention may further evaluate the financial data of other publicly traded companies, such as those in the same industry, and compares the various factors affecting stock value. The present invention also includes a system for determining the return to investors. The system may be a software-based application that collects receives financial data and uses this information to calculate the return to inventor through the company'"'"'s spreads and growth. The system is connected to a distributed network such as the Internet.
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Citations
30 Claims
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1. A computer-based system for automated performance evaluation of an organization, the system comprising:
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a processor; a computerized database storing financial information on the organization; computer-readable medium encoding instructions for automated performance evaluation in light of the financial information in said database; and communication means connecting said processor, said database and said computer-readable medium; wherein said instructions in said medium include; 1) an investment return evaluation module, said investment return evaluation module receiving the financial information from said communication means and calculating a return on invested capital; 2) an organization β
value determination module, said organization β
value determination module determining a β
value of the organization by (1) identifying comparable businesses that operate in the same field as the organization, (2) determining the β
values of the comparable businesses, (3) averaging the β
values of the comparable businesses to determine an unlevered β
value, (4) estimating an effect of the financing structure of the organization using the unlevered β
value, and (5) determining a relevered β
value for the organization by adding in the estimated effect of the financing structure;3) an investment costs evaluation module, said investment costs evaluation module receiving the financial information from said communication means and calculating a weighted average cost of capital using said β
value;4) a growth estimation module, said growth estimation module receiving the financial information from said communication means and calculating organic growth and growth through mergers and acquisitions, said growth through mergers and acquisitions being calculated by comparing the performance of the organization to the size or book value of the organization and assessing the organization using acquirer and non-acquirer strategies; 5) an economic performance calculation module, said economic performance calculation module calculating a total return to shareholders using the calculated return on invested capital, the calculated weighted average cost of capital, and the calculated growth; 6) a value determination module, said value determination module determining value drivers for the organization using the calculated total return to shareholders; and 7) a target capital structure development module, the target capital structure development module (1) estimating a current capital structure of the organization by identifying financing values associated with the organization, converting the financing values to market values, and calculating a market-based capital structure, (2) reviewing comparable businesses of the organization, and (3) reviewing a management approach of the organization. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 29, 30)
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13. A computer-implemented method for automated performance evaluation of an organization, the method comprising the steps of:
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accessing, by a computer, a computerized database storing financial information on the organization; calculating, by said computer, a return on invested capital using said stored financial information; determining, by said computer, a β
value of the organization by (1) identifying comparable businesses that operate in the same field as the organization, (2) determining the β
values of the comparable businesses, (3) averaging the β
values of the comparable businesses to determine an unlevered β
value, (4) estimating an effect of the financing structure of the organization using the unlevered β
value, and (5) determining a relevered β
value for the organization by adding in the estimated effect of the financing structure;calculating, by said computer, a weighted average cost of capital using said stored financial information and said β
value;calculating, by said computer, total growth using said stored financial information, said total growth comprising organic growth and mergers and acquisitions growth, said growth through mergers and acquisitions being calculated by comparing the performance of the organization to the size or book value of the organization and by assessing the organization using acquirer and non-acquirer strategies; calculating, by said computer, a total return to shareholders using the calculated return on invested capital, the calculated weighted average cost of capital, and the calculated total growth; calculating, by said computer, determining value drivers for the organization using the calculated total return to shareholders; estimating, by said computer, a current capital structure of the organization by identifying financing values associated with the organization, converting the financing values to market values, and calculating a market-based capital structure, reviewing, by said computer, comparable businesses of the organization, and reviewing, by said computer, a management approach of the organization. - View Dependent Claims (14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24)
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25. A computer-readable storage medium containing a set of instructions for evaluating performance of an organization, the set of instructions when executed by a computer implement a process comprising:
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accessing a computerized databases storing financial information on the organization; calculating a return on invested capital using said stored financial information; determining a β
value of the organization by (1) identifying comparable businesses that operate in the same field as the organization, (2) determining the β
values of the comparable businesses, (3) averaging the β
values of the comparable businesses to determine an unlevered β
value, (4) estimating an effect of the financing structure of the organization using the unlevered β
value, and (5) determining a relevered β
value for the organization by adding in the estimated effect of the financing structure;calculating a weighted average cost of capital using said stored financial information and said β
value;calculating total growth using said stored financial information, said total growth comprising organic growth and mergers and acquisitions growth, said mergers and acquisitions growth being calculated by comparing the performance of the organization to the size or book value of the organization and by assessing the organization using acquirer and non-acquirer strategies; calculating a total return to shareholders using the return on invested capital, the weighted average cost of capital, and the total growth; determining value drivers for the organization using the total return to shareholders; estimating a current capital structure of the organization by identifying financing values associated with the organization, converting the financing values to market values, and calculating a market-based capital structure; reviewing comparable businesses of the organization; and reviewing a management approach of the organization. - View Dependent Claims (26)
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27. An automated performance evaluation system comprising:
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a data storage device storing financial information on an organization; a network enabling access to the data storage device; a computer connected to the network; and a program resident on said computer, said program comprising a set of instructions comprising; calculating a return on invested capital using said stored financial information; determining a β
value of the organization by (1) identifying comparable businesses that operate in the same field as the organization, (2) determining the β
values of the comparable businesses, (3) averaging the β
values of the comparable businesses to determine an unlevered β
value, (4) estimating an effect of the financing structure of the organization using the unlevered β
value, and (5) determining a relevered β
value for the organization by adding in the estimated effect of the financing structure;calculating a weighted average cost of capital using said stored financial information and said β
value;calculating growth through mergers and acquisitions using said stored financial information, said growth through mergers and acquisitions being calculated by comparing the performance of the organization to the size or book value of the organization and by assessing the organization using acquirer and non-acquirer strategies; calculating total growth using said stored financial information; calculating a total return to shareholders using the return on invested capital, the weighted average cost of capital, and the total growth; determining value drivers for the organization using the total return to shareholders; estimating a current capital structure of the organization by identifying financing values associated with the organization, converting the financing values to market values, and calculating a market-based capital structure; reviewing comparable businesses of the organization; and reviewing a management approach of the organization. - View Dependent Claims (28)
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Specification