Abstract: Information technology (IT) value has been measured at various levels of analysis, yet few authors would contend that the search for value has reached a point where practitioners and theoreticians are satisfied with its outcomes. We present a new perspective that emphasizes the importance of understanding where potential value lies and how best to relate it contextually to the measurement of the firm's realized value across multiple levels of analysis. We develop the idea that complementary assets (especially business process design and human capital) influence the firm's realization of value, using concepts such as locus of value and value conversion contingencies. Expanding beyond earlier process models of IT value, which begin with IT expenditure, our analysis of IT value emphasizes the consideration of potential value for an IT investment both in ex ante project selection, and ex post investment evaluation. We illustrate and validate the application of our framework using IT investments in a variety of business domains.

Abstract: This study compares the market value of firms that reorganize in bankruptcy with estimates of value based on management’s published cash flow projections. We estimate firm values using models that have been shown in other contexts to generate relatively precise estimates of value. We find that these methods generally yield unbiased estimates of value, but the dispersion of valuation errors is very widethe sample ratio of estimated value to market value varies from less than 20% to greater than 250%. Cross-sectional analysis indicates that the variation in these errors is related to empirical proxies for claimholders’ incentives to overstate or understate the firm’s value.

Abstract: The Cap Gemini Ernst & Young Center for Business Innovation (CBI) has conducted a series of studies on the role of intangibles in creating value in the modern corporation and developed a rigorous, comprehensive model – the value creation index – of value creation for progressive companies, one that enables users to measure the impact of key intangible asset categories on a company’s market value. By devising a set of standardized measures, weighted according to their relative impact, managers have the tools to better drive and monitor their company’s future performance. At the same time, if disclosure rules change in parallel, investors will be armed with a more uniform, less subjective and more robust way of evaluating companies. Over time, the value creation index will evolve, continuing to identify value creation drivers, while remaining sufficiently flexible so it can adapt to the constantly changing nature of companies in the connected economy.

Abstract: The concept of value in relationship marketing is a theme of increasing interest. This paper examines the concepts of employee value, customer value and shareholder value and the linkages between them. It reviews research on the service‐profit chain framework and other related models and then discusses the extent to which linkage models or enterprise performance models, which integrate these components of value, have been adopted by organisations. An example is used to illustrate the adoption and use of an enterprise performance model. Implications for the retail financial services sector are considered.

Abstract: The metric Economic Value Added, or EVA, has recently become quite popular for analyzing company balance sheets, determining executive compensation packages and even project selection. The analysis entails comparing net after-tax operating profit against the allocated cost of capital for a given period. This paper shows, in general, that Market Value Added (MVA), which is the present value of a series of EVA values, is economically equivalent to the traditional NPV measure of worth for evaluating an after-tax cash flow profile of a project if the cost of capital is used for discounting. Additionally, insight is provided into the rationale behind EVA analysis through an interpretation of its capital and income allocation procedure for investment projects.

Abstract: Abstract With Statement of Financial Accounting Standards 115 (FASB 1993), insurers are now in the awkward situation that almost half of the balance sheet is marked to market. This has created a material inconsistency with the way liabilities are reported, thus diminishing the usefulness of financial reporting to shareholders and potential new investors. Discussion has emerged in the industry about the process of market valuing liabilities. The American Academy of Actuaries has formed a “Fair Valuation of Liabilities” task force to compare and review various alternative methodologies. During 1995 the Society of Actuaries and New York University jointly sponsored a conference on “Fair Value of Insurance Liabilities.” Motivated by the conference, this paper attempts to bridge the gap between option pricing and actuarial appraisal methodologies. The author suggests we refocus attention toward the assumption-setting process, which is the key driver of a fair valuation. In this regard, this paper attempts to advance practice and methodology with respect to life insurance company valuation.

Abstract: Systems and methods are provided for engineering, manufacturing, procuring and managing a financial product which combines a finance agreement, a life insurance policy, and a securitization mechanism used to create fixed income securities. The present invention includes a computer readable medium having computer executable instructions for performing a method for engineering and managing a financial product. The method includes calculating a first death benefit value, wherein the first death benefit value includes a selected death benefit value for payment to a beneficiary of an insurance policy. A second death benefit value is calculated. The second death benefit component is calculated based on a loan value added to an interest formula value. The interest formula value includes an outstanding loan value multiplied by a selected interest rate percentage. According to the teachings of the present invention, the second death benefit value is added to the first death value component to produce the total death benefit value.

Abstract: Part I: The Intellectual Underpinnings. 1. The Market Value of Insurance Liabilities and the Assumption of Perfect Markets in Valuation L. Girard. 2. The Valuation of Future, Cash Flows S. Gutterman. Part II: Elaboration of Theory and Considerations. 1. Market Valuation of Liabilities: Transfer Pricing, Profit Release, and Credit Spread T. Ho. 2. Fair Value Accounting for Financial Liabilities M. Wallace. 3. Earnings, Historical Cost Book Values, and Fair Value Disclosures in the Valuation of Stock Life Insurance Companies M.L. Michel. Part III: Illustrations of Fair Value Calculations. 1. Modeling Fair Value Financial Reporting Results for the Single Premium Deferred Annuity P. Duran, A.E. Vilms. 2. Considerations for Ascertaining Term Insurance in a Fair Value Context T. Herget. Vita of Contributors.

Abstract: There are some common forces in today’s government environment which are shaping the direction of public management in many countries. Some of the forces, for example, can be linked to the realities of the global village. These influences include what I have labeled elsewhere the ‘CNN generation’ (Halachmi, 1997) to denote the changes in the way the public views its government and the marked changes in the role of the media in shaping the public agenda and attitudes toward government. Another environmental force that results from the evolution of the global village is the fierce competition among companies and nations over the sympathy and the purses of citizens in other countries. Other environmental forces that shape government activities at the start of the new millennium involve the embracing of concepts such as quality, customer satisfaction and value creation as criteria for assessing organizational performance. At the same time the public and the media keep articulating demands for accountability, ethics and transparency; empowerment of employees; and timely exploitation of advances in information technology. These environmental forces are highly interactive. For example, advances in information technology have resulted in a reduction in the efficiency gap between large and small organizations, thereby creating a more competitive environment than that which existed before (Australian CPA, 1998). Globalization has had a similar impact, in terms of opportunities in the opening of new markets and the impact of new competitors from elsewhere in the world marketplace. For governments, globalization and the media’s scrutiny of national and international events around the clock has fueled critical assessments of government operations with requests for more and better services on the one hand, and growing demands for economy, efficiency, accountability and transparency on the other. Advances in information technology are now allowing organizations to capture information previously considered unviable or impossible. This, in turn, is allowing managers, as well as most other stakeholders of a government agency, to

Abstract: This paper applies the extreme value theory to the Constant Proportion Portfolio Insurance (CPPI) . In particular, the choice of the standard multiple is detailed according to the statistical estimation of the behaviour of extreme variations in rates of assets returns. Moreover, we introduce the distributions of interarrival times of these extreme movements and show their impact on the portfolio insurance. We illustrate these results on S&P 500 data.

Abstract: We present a simple put option pricing procedure within an asset–liability valuation model that can be used to estimate the incentives facing stock-based life insurance firms to voluntarily sell their businesses under various operating and regulatory conditions. Estimates are derived for samples of 11 sold firms and 24 continuing Australian life insurance companies over a period of industry consolidation. The put option values interact with other actuarial and accounting components of the fair value of these life insurance firms and are used to assess the effectiveness of accounting and actuarial measures of capital, under static or dynamic based solvency testing models.

Abstract: Companies recognise that their ability to become world-class competitors is based on the establishment of their strategies. This paper concentrates on the development of a new framework for locating the firm’s value as a competitive weapon in a market segment. In terms of contribution, the Value Matrix enlaces the firm’s vision with the target market’s needs. Moreover, this framework provides more flexibility to conventional businesses as well as new businesses working in dynamic interaction with their existent environment.

Abstract: While the “value” style of investing fell on hard times in 1998-2000, the cornerstone of that approach--discounted cash-flow analysis--is still a sound valuation method and can be used to calcuate the fair value of “growth” as well as “value” companies. A DCF analysis of selected companies finds the growth stocks overpriced and the value stocks underpriced. Looking forward, however, values investors may need to retool their approach to fit today9s market realities, including the possibility that some declining, old-line companies that appear to be good value are not.