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Exhibition: Corporate returns (or performance) and corporate
resources Introduction: In the figure below each of the corporate
returns (green highlight) can be associated with a corporate resource
(yellow highlight). One may ask why the standard corporate balance sheet
does not include other resources than debt and equity. One answer may be
that the firm does not control those resources as much as they control debt
and equity and therefore they are less relevant to include in the balance
sheet. However, just because we usually only measure a return on equity and
/ or a return on 'total' assets it does not imply that these are the only
return measures. E.g. if it was worth the money we could also measure the
combined return from equity, debt and human capital. The figure's
perspective of corporate performance is deeply rooted in the classis theory
of finance, because each stakeholder’s economic value of dealing with the
firm could be calculated as the present value of the stakeholders' future
cash flows (actual returns) that accrue from the relation with the firm.
This exhibition is made by ideas from a figure in Copeland, Koller, and
Murrin [1995, page 24]. |
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Other kinds of corporate resources
are: 3) Human capital.
4) Public
infrastructure
of importance for the firm. 5) Resources that suppliers dedicate
to generate the suppliers return. 6) Resources that consumers
dedicate to searching and evaluating the firm's products. |
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- Copyright 1997-2010, ViamInvest. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Legal notice. |
