Future-proof your business today for stronger performance tomorrow
The Stress Test Every Business Needs: A Capital Agenda for Confidently Facing Digital Disruption, Difficult Investors, Recessions and Geopolitical Threats provides a comprehensive approach to creating value and flexibility in an increasingly volatile business environment that presents both great risks and opportunities every day. The authors extend the banking “stress test” concept to a company’s Capital Agenda — how executives manage capital, execute transactions and apply corporate finance tools to strategic and operational decisions. Having a static Capital Agenda, however appropriate for your current market position, is not enough in today's uncertain world. Long-term success comes from building resilience into each element and in the way those elements interact.
The book uses a broader definition of business stress that includes traditional macroeconomic and geopolitical risks, as well as technological disruption, hostile takeovers and activist shareholders. Companies that make poor strategic decisions or underperform operationally will likely find themselves facing great stress. And that stress is symmetric; threats come from downside risks and from missed opportunities.
The chapters address the how and why of essential issues such as:
- Formulating corporate strategy in a digital world
- Pre-empting activist shareholders
- Restoring distressed companies to operational and financial health
- Ensuring effective collaboration among strategy, finance and operations
- Getting the most out of your advisors
- Proactively managing intrinsic value
- Rigorously allocating capital across the enterprise
- Acquiring and divesting for optimum value
- Syncing financing decisions with business strategy and capital market conditions
- Incorporating tax planning throughout the Capital Agenda
- Liberating excess cash with leading working capital management practices
- Aligning strategic goals and metrics to reach your company’s full potential
Table of contents
Chapter 1 How resilient is your Capital Agenda?
- by Jeffrey R. Greene
- Framing decisions within the Capital Agenda
- The Capital Agenda’s building blocks
- Who can benefit from this book?
- Universal lessons from Allergan and Valeant
- Stress test your Capital Agenda
- Making the most of your Capital Agenda
- Performance improvement opportunities
- Navigating the book
- Chapter 2 Do you know the intrinsic value of your company and how to manage it?
- Chapter 3 Are you allocating capital across the enterprise to reduce C-suite stress?
Chapter 4 Are your portfolio reviews timely, objective, and thorough?
- by Jeffrey R. Greene and Jeff Wray
- Diagnosing the health of your portfolio management process
- Preparation drives value
- An acquisition perspective
- Approach ownership flexibly
- Implement world-class portfolio management
- Can “virtual” carve-outs show the way to cost reduction?
- Confront barriers to success
- Putting theory into practice
- Chapter 5 Do your acquisitions consistently pay off for shareholders?
Chapter 6 Are you planning and executing divestments for maximum value?
- by Paul Hammes and Subin Baral
- Divesting is critical to your capital strategy
- What defines a successful divestment?
- Divestment guiding principles
- Leading sources of value erosion
- Can you increase business value before divesting?
- What does it take to close the deal and maximize value?
- Divesting for value
- Chapter 7 Do your financing choices support flexibility and efficiency?
- Chapter 8 How well does working capital management contribute to cash flow and earnings?
- Chapter 9 Is tax a full partner in building resilience and driving value?
- Chapter 10 Are strategy, finance, and operations integrated for optimal value creation?
Chapter 11 How can you get the most out of your advisors?
- by Giri Varadarajan and Aayush Tulsyan
- Setting the context
- First principles
- When it is appropriate—and not appropriate—to use an advisor
- Hiring process
- Advisors as competitors and as peers
- How to start the relationship with an advisor
- Fourteen other leading practices (and what not to do) when hiring and managing advisors
- Beyond advisors to journey partners
- Chapter 12 Can your strategy thrive in a digital world?
- Chapter 13 How can you pre-empt activist shareholders?
- Chapter 14 How should you restore a distressed company to health?
- Chapter 15 Will your strategic goals ensure your company reaches its full potential?
- Contributor Biographies
- About EY
- End User License Agreement
- Title: The Stress Test Every Business Needs
- Release date: September 2018
- Publisher(s): Wiley
- ISBN: 9781119417941
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