Cockpit
Statements
Indexed Investment Valuation
Evaluate the individual value drivers in your investments, which wouldn't be possible without an indexed approach. Conglomerates or private investors (such as private equity firms and hedge funds) perform portfolio analyses, M&A analyses and due-diligence based on an indexed approach because it measures true operating performance only, irrespective of the effects of business cycles or business types
Measure your value contributions
Indexed Investment Valuation...
- ...measures the value contribution of each financial metric to see if growth, margin or productivity, etc. is driven growth
- ...makes different time periods, wheter in upturns or downturns, directly comparable
- ...enables comparing apples with oranges. A service division in a portfolio can now be compared with the production division of another company
- ...alerts you to value gaps for your attention and management
Index your investment plans
The graph on the left illustrates the amount that the company has contributed to value growth of EBIT margin in the portfolio. One can see that each year Companies A and B contributed positively to growth (as the Operating Rank is above the median). In contrast, Company E detracted from value growth. Company D contributed to value growth in the first two years but then turned negative for the remaining years. Company C performed similarly but turned positive again in 2008 to again contribute to value growth. This view is only possible using an indexed approach.
The Operating Ranking on the right illustrates comparisons of different companies and different financial metrics based on calculations of their Operating Ranks. Because the ranks are based on percentage positions - namely relative performance - the values become standardized and can be combined or averaged.
What you get
Indexed Investment Valuation includes the following analysis tools:
Operating Alpha, Operating Index, Operating Rank and Obermatt Cockpit are provided as needed.
How it appears
In the example of the Swiss machine manufacturer Rieter, you can see the type of data and analysis you would receive as part of the Indexed Strategy Controlling product: (PDF download 1MB).
Interested?
We do your first indexed performance measurement with your own financials for one of your investments free of charge. Contact Us for a personal discussion.
Further information
Who has already implemented our solutions-
How indexing operating performance works -
How you use indexing performance in bonus targets -