About this blog

This Managing-Shareholder-Value blog deploys the knowledge fields of Accounting, Corporate Finance, Taxation, IT, Marketing and others to share with readers on pointers to create, increase, maximize and or unlocking shareholder value.

Practically every day, we read in the business section of papers/media, that companies want to maximize/increase shareholder value. However, do you know that this simple management principle of enhancing shareholder value is nothing new. It is known as Value Based Management which simply states that management should first and foremost consider the interests of shareholders in its business decisions. Sadly to say, in many cases, when companies make announcements, most of times they are for going for rights issue to cover eroded capital base or going into new ventures/business or appointing new CEOs and using words like increasing shareholder value.

 The Objectives of this blog are as follows:

  1. to share and provide readers basic understanding / knowledge / ideas / tips on what really increase or maximize shareholder value. How shareholder value being eroded or destroyed will also be discussed;
  2. to look at various company’s announcements/actions to see how and what the top management do to try to increase/maximize shareholder value and
  3. last but not least to bring continual awareness that every top executive/management level should owe utmost level of responsibility to their shareholders

The Content of this blog contains some of the following topics for readers to better understand about shareholder value:

  • The importance of understanding The Cash Flow Statement instead of only Accounting Earnings/profits;
  • Cash Versus Accounting profit and Accounting gimmicks or better known as Creative Accounting;
  • Basic understanding of adjustments made in Free Cash Flow concept;
  • Have a good grip in the understanding of Time Value Of Money & Discounted Cash Flow for valuation purposes;
  • Inorganic growth vide mergers/acquisition to maximize shareholder value;
  • Overseas expansion strategy as a tool to increase shareholder value;
  • Capital management and the need to be savy with the various Capital Investment appraisal methods used like net present value,internal rate of return, etc;
  • Economic value added- what it is, advantages of other methods and how to increase economic value added;
  • Know what is Enterprise value, Market Value Added;
  • Cash distribution-Dividend payout and its impact on shareholders;
  • Non cash distribution-share scrips/treasury shares;
  • Understand effective tax rate and how to improve it;
  • Strategic Market Position to increase shareholder value;
  • Understand company’s cost of capital;
  • Share buy-back or Share Re-purchase;
  • Gearing/leverage and its impact on shareholder value;
  • Articles on the ways to increase or maximize shareholder value;
  • Interpretation of financial statement to see whether the board is creating shareholder value
  • Effective taxation rate and
  • other topics that can boost/enhance shareholder value.