Shareholder Value Added is a measurement to see if it is worth the expense for an investor to buy stock in a company where Shareholder Value Added integrates financial statement of the business into one significant evaluation. It is also represent the economic profits generated by a business and beyond the minimum return required by all providers of investment. While, value is added when the overall net income cash flow of the business exceeds the economic cost of all the capital employed to produce the operating profit. Methadology
The Shareholder Value Added is a most recommended approach in assisting management in decision making process where the application include performance monitoring, capital budgeting, output pricing and market value of the entity. Following are the formula used to calculate Shareholder Value Added: Shareholder Value Added = NOPAT – Cost of Capital
To obtain the Shareholder Value Added is by subtracting the cost of capital (WACC) from net operating profit (NOPAT). Application
The function of Shareholder Value Added is to gives an insight into the investment performance of the business by identifying the opportunity cost of the investment, being the cost of capital and comparing this to the return generated from the business. The Shareholder Value Added is important for a company not only to compete with their competitor but also need to subject to the capital market regulation. Fujitsu Shareholder Value Added
* Technology – Development of the world’s first High Electron Mobility Transistor, an ultra high speed transistor, the introduction of the Japanese processing Extended Features and the successful launch of “PROPOSE”, an integrated services framework for information and communication system. * Customer – Fujitsu ideas and actions are originate form a customer centric approach to business where they will thinking of ways to contribute to their business activities. Fujitsu also value their customer by always proposing new ideas to attract and establishing a long term relationship with their customer.
Balance Score Card
Balance Score Card is a tool of strategic planning and management system that is used in an organizations and government sector to support business activities to the vision and strategy of the organization, improve internal and external communication and also monitor organization performance against strategic goals. Methadology
Balance Score Card has a different approach in determining the company value where it used 4 perspectives that will enables organizations to translate their company’s vision and strategy. The 4 perspectives of balanced score card consists of financial perspective, customer perspective, business process perspective and learning and growth perspective. The coverage areas on the Financial Perspective are mostly showing the organization expected ROI, Cash Flow, ROC and financial result while the Business Process Perspective is more focused on how to deliver a better product line in an organization. The learning and growth perspective is more emphasized the organization employee welfare and the customer perspective is more towards improving the relationship between the organization and their customer. Application
Balance score card was invented by Dr. Robert Kaplan and David Norton in order to measure the performance framework that added criteria such as strategic non financial performance measures to traditional financial metric where this will give a balance view of the organizational performance. Maybank Balance Score Card
Maybank is one of the leading finance company in Malaysia that has use Balance Score Card in order to achieve their vision and mission in providing the best services to their customer. The vision and mission of Maybank is to achieve a top 10 position as a bank of choice in the upscale consumer market for strategic deposit or wealth management products and to be a...