Shareholder value tool
First Claim
1. A computer-based system for automated performance evaluation of an organization, the system comprising:
- a computerized database storing financial information on the organization;
a processor for performing instructions for automated performance evaluation of the organization in light of financial information accessed from said computerized database; and
communication means connecting said computerized database and said processor,wherein said instructions performed by said processor include;
an investment return evaluation module, said investment return evaluation module receiving the accessed financial information and calculating a return on invested capital;
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 effect of the financing structure;
an investment costs evaluation module, said investment costs evaluation module receiving the accessed financial information and calculating a weighted average cost of capital using the β
value of the organization;
a growth estimation module, said growth estimation module receiving the accessed financial information and calculating a total growth comprising an organic growth and a mergers and acquisitions growth;
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 total growth; and
a lever strength analysis module, said lever strength analysis module identifying at least one financial change to the organization that would improve the total return to shareholders, and identifying at least one business action by the organization that would cause the at least one identified financial change.
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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. Proposed actions may then be evaluated according to their predicted changes to accounting values and the resulting changes in shareholder value from these changes.
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Citations
38 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 computerized database storing financial information on the organization; a processor for performing instructions for automated performance evaluation of the organization in light of financial information accessed from said computerized database; and communication means connecting said computerized database and said processor, wherein said instructions performed by said processor include; an investment return evaluation module, said investment return evaluation module receiving the accessed financial information and calculating a return on invested capital; 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 effect of the financing structure;an investment costs evaluation module, said investment costs evaluation module receiving the accessed financial information and calculating a weighted average cost of capital using the β
value of the organization;a growth estimation module, said growth estimation module receiving the accessed financial information and calculating a total growth comprising an organic growth and a mergers and acquisitions growth; 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 total growth; and a lever strength analysis module, said lever strength analysis module identifying at least one financial change to the organization that would improve the total return to shareholders, and identifying at least one business action by the organization that would cause the at least one identified financial change. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18)
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19. A computer-implemented method for automated performance evaluation of an organization, the method comprising the steps of:
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a computer accessing remotely stored financial information; said computer storing said financial information; said computer calculating a return on invested capital using said stored financial information said computer 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 effect of the financing structure;said computer calculating a weighted average cost of capital (WACC) using said stored financial information and said β
value of the organization;said computer calculating a total growth using said stored financial information, said total growth comprising an organic growth and a mergers and acquisitions growth; said computer calculating a total return to shareholders using the calculated return on invested capital, the calculated weighted average cost of capital, and the total growth; said computer identifying at least one financial change to the organization that would improve the total return to shareholders; and said computer identifying at least one business action by the organization that would cause the at least one identified financial change. - View Dependent Claims (20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36)
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37. 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 financial information on the organization; storing said accessed financial information; 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 effect of the financing structure;calculating a weighted average cost of capital using said stored financial information and said β
value of the organization;calculating total growth using said stored financial information, said total growth comprising organic growth and mergers and acquisitions growth; calculating a total return to shareholders using the return on invested capital, the weighted average cost of capital, and the total growth; identifying at least one financial change to the organization that would improve the total return to shareholders; and identifying at least one business action by the organization that would cause the at least one identified financial change. - View Dependent Claims (38)
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Specification