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? 1
Jeffrey R. Greene
Chapter 2 Do you know the intrinsic value of your company and how to manage it? 17
Daniel Burkly
Chapter 3 Are you allocating capital across the enterprise to reduce C-suite stress? 33
Jeffrey R. Greene
Chapter 4 Are your portfolio reviews timely, objective, and thorough? 51
Jeffrey R. Greene and JeffWray
Chapter 5 Do your acquisitions consistently pay off for shareholders? 65
Brian Salsberg
Chapter 6 Are you planning and executing divestments for maximum value? 81
Paul Hammes and Subin Baral
Chapter 7 Do your financing choices support flexibility and efficiency? 101
K.C. Brechnitz
Chapter 8 How well does working capital management contribute to cash flow and earnings? 113
Sven Braun and Steve Payne
Chapter 9 Is tax a full partner in building resilience and driving value? 125
Bridget Walsh and Erica Lawee
Chapter 10 Are strategy, finance, and operations integrated for optimal value creation? 137
Sharath Sharma and Daniel Burkly
Chapter 11 How can you get the most out of your advisors? 151
Giri Varadarajan and Aayush Tulsyan
Chapter 12 Can your strategy thrive in a digital world? 169
Tony Qui and Glenn Engler
Chapter 13 How can you pre-empt activist shareholders? 185
Shyam Gidumal
Chapter 14 How should you restore a distressed company to health? 199
Andrew Wollaston and Donald Featherstone
Chapter 15 Will your strategic goals ensure your company reaches its full potential? 217
William Achtmeyer and John Trustman
Glossary 231
Contributor Biographies 237
About EY 249
Index 251
