WO2000034911A2 - Systeme de modelisation, d'evaluation, de gestion et de description des consequences de decisions commerciales sur la valeur marchande - Google Patents

Systeme de modelisation, d'evaluation, de gestion et de description des consequences de decisions commerciales sur la valeur marchande Download PDF

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Publication number
WO2000034911A2
WO2000034911A2 PCT/US1999/029467 US9929467W WO0034911A2 WO 2000034911 A2 WO2000034911 A2 WO 2000034911A2 US 9929467 W US9929467 W US 9929467W WO 0034911 A2 WO0034911 A2 WO 0034911A2
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Prior art keywords
business
asset
assets
value
market
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PCT/US1999/029467
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English (en)
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WO2000034911A3 (fr
Inventor
Barry D. Libert
Edward J. Giniat
Madhu S. Nott
Richard E. S. Boulton
Robert Hodgkinson
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Arthur Andersen Llp
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Priority to AU21765/00A priority Critical patent/AU2176500A/en
Publication of WO2000034911A2 publication Critical patent/WO2000034911A2/fr
Publication of WO2000034911A3 publication Critical patent/WO2000034911A3/fr

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    • G—PHYSICS
    • G06—COMPUTING; CALCULATING OR COUNTING
    • G06Q—INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q10/00—Administration; Management
    • G06Q10/06—Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling
    • G—PHYSICS
    • G06—COMPUTING; CALCULATING OR COUNTING
    • G06Q—INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q30/00—Commerce
    • G06Q30/06—Buying, selling or leasing transactions

Definitions

  • the present invention concerns business information, accounting, and management systems and methods.
  • Business information and accounting systems are typically computer-based systems that assist in the financial operation and management of businesses These systems facilitate accounting based on generally accepted accounting principles Implementing these principles entails classifying and reporting financial data as itemized income statements and balance sheets.
  • Income statements report income and expenses of the business, for example, sales revenue and employee wages
  • Balance sheets report physical and financial assets and liabilities, such as inventory value, real estate value, bank account balances, and total debt.
  • the difference between total assets and total liabilities on the balance sheet defines the net worth, or book value, of the business.
  • This accounting definition of business value treats financial and tangible assets as the only assets affecting how much a business is actually worth.
  • a market-to-book multiple measures the gap between the book value of a business and the market value of the business. For instance, a market-to-book multiple of five means that the market value, or total stock value of a business, is five times the book value of the business. In other words, the book value of this business underestimates its market value by a factor of five.
  • the inventors have devised methods, software, and systems that assist users, such as business executives, to see how market value is created and diluted, to measure the impact of operating decisions on market value, and ultimately to make operating decisions that consistently enhance market value.
  • the original core premise of the invention is that business operating decisions reflect or imply investments mto specific categories of assets that in turn govern or affect the market value of a business.
  • the inventors devised the following primary embodiments of the invention.
  • a first embodiment of the invention classifies business assets and information into tangible and intangible assets.
  • the primary asset categories include physical and financial subcatego ⁇ es, and employee and customer subcatego ⁇ es. These asset categories form an exemplary framework for modeling the market value of a business.
  • a second embodiment ofthe invention classifies business assets and information from multiple business entities, including both the business user's company and other companies, according to the physical, financial, employee, and customer categories. Combining the business users information with information about other companies according to the classification framework provides a more accurate model of market value.
  • a third embodiment of the invention allows the business user to simulate and display the effect of operational decisions on market value.
  • the system uses a number of advanced mathematical techniques such as regression analysis, and other analytical devices such as neural network technology and system dynamics.
  • a fourth embodiment of the invention allows a business to calibrate the model based on the effect of similar investments in other companies. Consequently, this recahbration allows the business user to measure its operational and investment decisions based on anticipated market value responses and to integrate this information into its decision making
  • a fifth embodiment of the mvention automates the transfer of information from a business accounting system into the market-value model, allowing regular updates of projected market performance based on daily, weekly, or monthly accounting and market data.
  • these market projections can be integrated mto the decision making process of a business to allow for continual tuning of business operations to maximize market value
  • a sixth embodiment of the invention provides a visualization system which not only illustrates market value components based on the asset categories and overall market value but also their trajectories over time.
  • the trajectories are particularly useful for charting a history of operating decisions and correlating these decisions or changes m market value to events internal and external to a business. Several business can be tracked for comparative strategic analysis. Thus, this embodiment provides insights into how internal and external events affect market value.
  • these and other embodiments of the mvention allow business decision makers to project how operating decisions, such as decisions to hire or fire workers or to buy equipment or to back buy stock or to spend more on advertising, are likely to affect market value.
  • these and other embodiments provide market-sensitive guidance for making business management decisions.
  • Figure 1 is a block diagram of a business information and management system embodying the present invention.
  • Figure 2A is a block diagram of an asset categorization scheme including tangible and intangible assets of an operating business.
  • Figure 2B is a block diagram of another asset categorization scheme including tangible and intangible assets of an operating business.
  • Figure 3 is a diagram illustrating layers of the asset categorization scheme of Figure 2A.
  • Figures 4Aa* ⁇ Hfere block diagrams illustrating acquisition and staging of data from external sources.
  • Figure 5 is a block diagram of a market valuation engine based on categorized assets.
  • Figure 6 is a block diagram of a high-level stock and flow of the engine of Figure 5.
  • Figure 7A is a diagram showing details of the physical portion of the exemplary high-level stock and flow diagram of the engine of Figure 5.
  • Figure 7B is a diagram showing details ofthe financial portion of the high-level stock and flow diagram of the engine of Figure 5
  • Figure 7C is a diagram showing details of the employee portion of the high-level stock and flow diagram of the engine of Figure 5.
  • Figure 7D is a diagram showing details of the customer portion of the high-level stock and flow diagram of the engine of Figure 5.
  • Figure 8 is a listing of simultaneous equations which are the mathematical equivalent of the stock-and-flow diagram of Figure 7
  • Figure 9 is a facsimile of a unique tetrahedronal graphic aid showing the relative contribution of physical, financial, employee, and customer assets to the market value of a of publicly traded companies.
  • Figure 10 is a facsimile of a unique tetrahedronal graphic aid showing the relative contribution of physical, financial, employee, and customer assets to the market value of clusters of publicly traded companies having similar relative asset contributions to market value.
  • Figure 1 1 is a facsimile illustrating rotation of the unique tetrahedronal graphic aid of Figure 10 about several of its axes.
  • Figure 12 is a block diagram of a heat map graphic aid used to visualize the contribution of physical, financial, employee, and customer assets to the market value of clusters of publicly traded companies having similar relative asset contributions to market value.
  • Figure 13 is a block diagram of the heat map graphic aid of Figure 12 showing members of a selected cluster, a first pie chart representing the average contribution of asset categories to market valuation of the selected cluster and a second pie chart showing the asset-category contributions for a particular selected business within the cluster.
  • Figure 14 is a facsimile of several heat map graphic aids illustrating a historical asset- contribution tracking feature of the heat map graphic aid of Figures 12 and 13.
  • Figures 15-23 are facsimiles of graphic aids incorporating teachings of the present invention.
  • Figure 24 is a diagram showing a side-by-side comparison of conventional book value and market value, both depicted according to teachings of the present invention.
  • Figure 25 is a diagram illustrating the difference between a book value of a software company and its market value.
  • Figure 26 is a set of graphic aids depicting market value of typical businesses in various industries, according to teachings of the present mvention.
  • Section 1 describes an exemplary computer system which is linked, or networked, with several sources of business information.
  • Section 2 describes an exemplary asset (or business data) classification schemes which provides a foundation for modeling market value and the effect of business decisions on market value.
  • Section 3 desc ⁇ bes exemplary market value models and systems dynamics simulations for dissecting the components of market value and estimating the effect of business operating decisions on market value.
  • Section 4 describes several unique visual displays based on a four- and fi ⁇ e-asset classification schemes
  • Section 5 is a glossary which defines several terms important to the description
  • Section 6 includes appendices A, B, C which provide details of va ⁇ ous actual or potential implementations, or embodiments, of the invention
  • Section 7 is a conclusion which highlights some functions and benefits of exemplary embodiments of the mvention
  • Section 1 Exemplary Computer System
  • Figure 1 shows an exemplary networked computer system 110 comprising a standard personal computer 1 12 coupled via a local area network to a server computer 1 14
  • computers 110 and 112 include processors which cooperate with electronic, magnetic, optical memo ⁇ es, and/or other information storage devices, to execute stored computer programs and related methods of the invention
  • computer 112 includes or accesses functional block 1 15 which itself includes a content block 115a and an analytic block 115b
  • functional block 1 15 includes computer programs, data, and data structures that enable the system to model and estimate market valuations or direction of market- value changes
  • content block 1 15a includes news and contextual analysis data as w ell as accounting data and other information indicative or representative of business operating decisions
  • Functional block 115 is shown separate from server 114 and computer 1 12 to represent that the functions can be implemented on a computer singularly or in a distributed manner
  • Server 114 is also coupled to a host system 116 residing at a customer site and having access to an associated customer database 117 which contains accounting data and other data indicative or representative of business operating decisions Server 1 14 is further coupled to a data warehouse 120 which includes one or more data storage and management devices Such devices comprise both a customer data warehouse and an extracted-information-provider-data warehouse
  • Data warehouse 120 in the exemplary embodiment, comprises one or more computer systems having network connection capabilities, allowing it to obtain further information from one or more external information providers through a wide-area network 130
  • Wide-area network 130 comp ⁇ ses one or more communication mediums, such as fiber optics, Internet-based networks, satellite communications, and va ⁇ ous other high bandwidth communication devices, such as Tl and T3 lines
  • a data collection and analysis system 140 for collecting business items and other business operational decision information related to internal and external businesses
  • Collection system 140 interfaces with several external sources of business information, compiling it in storage devices 142 and a data warehouse 144
  • database 146 collects customer raw data related to operating decisions of a customer business
  • the customer raw data includes business information related to four categories of assets physical assets, financial assets, employee assets, and customer assets (Some embodiments further include analogous mechanisms and system for collecting information related to other categories of assets, such as organizational assets )
  • collection system 140 resides at a provider site, that is, with an entity that advises businesses m making business decisions
  • system 140 is a logical collection point for business information from external providers
  • external providers include a financial- information provider 150, an employee-information provider 152, a customer- information provider 154, and a physical-information provider 156
  • the exemplary embodiment depicts a single-entity provider for each of the four categories, other embodiments of the invention rely on one or more providers for each category and/or several providers for one or more of the information categories
  • Collection system 140 further comp ⁇ ses a functional block 148 which mirrors or corresponds to functional block 1 15 Block 148 evidences the notion that such functionality can reside entirely or partially withm collection system 140 as well as within computer 112
  • Figure 2 A shows a unique asset (or business-information) classification scheme 210 for use with system 1 10
  • Classification scheme 210 classifies both tangible and intangible assets into a four-class system including at least two classes for tangible assets and at least two classes for intangible assets More particularly, the scheme classifies tangible assets into respective physical and financial categories 212 and 214, and intangible assets into respective employee and customer categories 216 and 218
  • Examples of physical assets include inventory, production capacity, and equipment, and examples of financial assets include operating capital, cash flow and investor return
  • Examples of customer assets are buyers or customers, channels, and brand, and examples of employee or provider assets are organization capital, human capital and supply chain Detailed definitions of these categories (as well as other terms) are included in the glossary section of this description
  • Appendix A also includes a catalog of business data which can be classified according to the classification scheme
  • Figure 2B shows another unique asset (or busmess- ⁇ nformat ⁇ on)class ⁇ ficat ⁇ on scheme 220, similar but distinct from that shown in Figure 2A.
  • Classification scheme 220 includes catego ⁇ es for tangible and intangible assets (at least two for tangible assets and at least two classes for intangible assets) as well as an mterrelational, binding, or hub, category, which the inventors call an organizational (and structural) asset category
  • scheme 220 classifies tangible assets into a physical category 222 and financial category 224, and intangible assets mto respective employee, customer, and organizational asset catego ⁇ es 226, 227, and 228.
  • Physical asset category 222 includes property, plant, equipment and inventory.
  • Financial asset category 224 includes cash and equivalents, short- and long-term investments, accounts receivable, debt and equity, and prepaids and other.
  • Employee (or human) asset category 226 includes employees, suppliers, and partners.
  • Customer asset category 227 includes customers, distribution channels, and alliances.
  • Organization asset category 228 includes organizational and structural asset sub-catego ⁇ es.
  • the organizational sub-category includes leadership (the guiding role of management to direct, command, and influence an organization), strategy (the organization's business and operational plans for attaining the organization's objective), knowledge (the individual and collective familiarity, awareness or competencies acquired through expe ⁇ ence or study), and values (the organization's p ⁇ nciples, standards or qualities regarded as worthwhile or desirable).
  • the structural sub-category of organizational assets includes reputation (the belief about the organization, its brand and its products or services and brands), innovation (the expertise, resources, methodology, creativity, discipline, risk-taking, planning, timelines, budgeting, that are directly or indirectly employed in the creation of the organization's processes and product and service offerings), systems (the organization's set of interrelated, interacting or interdependent mechanical, electrical, electronic or logical components and rules), and processes (the organization's series of operations, methods, actions, tasks or functions).
  • Figure 3 shows a chart 310 which embodies the premise that the market value of a business depends on assets in the four asset categories shown m Figure 2A, namely physical, financial, employee, and customer Chart 310 also shows that the assets in the categories can be measured directly or indirectly using specific business information
  • chart 310 shows that the customer catego ⁇ es includes customers, brands, and channels, and that these assets can be measured, for example, using data representative or indicative of the number of active customers, propensity of customers to purchase from the business, market share of the business, propensity of the business to leverage outbound partners, propensity of the business to leverage knowledge of customers, and the strength of one or more brands (trademarks.)
  • propensity and strength factors can be based on actual statistical measures or on crude relative rankings.
  • measures or proxies are described below m conjunction with an analytic engine which incorporates these measures to determine the effect of operational decisions as categorical investments or divestments and the effect of implied investment or divestment decisions on market value.
  • Appendix B includes a questionnaire and associated chart for implementing a relative scheme not only to assess or appraise the effective cont ⁇ bution of assets or the asset categories to market value, but also to comparatively analyze the relative effectiveness of one company's asset effectiveness to that of another.
  • This questionnaire and charting scheme can be implemented with or without a computer.
  • Figures 4A and 4B show a data collection system 410 facilitating the collection of information for use by a user executing the Appendix B procedure or by a computer implementing an automated modeling or simulation process as desc ⁇ bed below.
  • Data collection system 410 interfaces with external data sources comprising a financial-information provider 412, a customer-information provider 414, a physical-information provider 416, and a labor- information provider 418 to provide batch transfer via respective data transfer devices 422, 424, 426 and 428 to respective staging-area storage devices 432, 434, 436, and 438.
  • the staging-area storage devices perform data validation, including, for example, clearing, business-rules checking, and format checking and correcting.
  • data now termed operational data
  • operational data passes to operational data storage devices 442, 444, 446 and 448.
  • the data is then subject to an aggregation and derivation process, which aggregates the data, for example, according to business name, industry, total revenues, size, or so forth, and which derives other proxy or derivative data. For example, one derivation, in the exemplary embodiment, derives total market value from total number of shares outstanding and a share price.
  • aggregated information passes to a financial data warehouse 452, a customer data warehouse 454, a physical data warehouse 456, and labor (employee or provider) data warehouse 458.
  • the data of the financial, customer, physical, and employee data warehouses then passes to respective pairs of data marts 462a and 462b, 464a and 464b, 466a and 466b, and 468a and 468b.
  • the data marts are organized optionally as pairs m the exemplary embodiment for enhanced bandwidth and redundancy.
  • Figure 5 shows an exemplary market-valuation engine 510 which is coupled to data collection system 410 via an information interchange block 512.
  • Market- valuation engine 510 uses the exemplar)' asset-classification scheme of Figure 2A or Figure 2B as a basis for developing strategically useful models of how business items affect or potentially affect the market value of a business. (The invention, however, is not limited to the particular assets or categories of this scheme.)
  • market-valuation engine 510 exists withm one or more business consulting centers withm a unique business consulting system.
  • the consulting centers collect and processes data in accord with system similar to those in Figures 1 and 4.
  • Two or more business client computer systems couple to each consulting system via a wired or wireless public or private local- or wide-area network, such as the Internet.
  • the businesses communicate relevant business data and advise requests to the business consulting center and the consulting center processes this data along with other relevant market and industry specific data to provide global, regional, industry market value projections and other indications, assessments, and appraisals in accord with various aspects of the present mvention.
  • the business can then use these to guide their business decisions.
  • the exemplary engine implements the following six exemplary market-valuation models.
  • a first embodiment of the model views market value as a function of tangible and intangible business items. This is expressed in mathematical functional notation as
  • MV f(T, I) Eq. 1
  • T denotes one or more tangible business items
  • I denotes one or more intangible business items.
  • This generic formulation encompasses the representation of market value as the sum of book value, that is, tangible assets, and a gap-filling number representative of goodwill).
  • the inventors model the market value MV of a business as
  • MV f(K,T, K.I) Eq. 2 where K t and K, are market-oriented weighting factors.
  • K t and K are market-oriented weighting factors.
  • the actual model could be an additive, multiplicative, or mathematical combination.
  • a particular implementation of this model views the market value MV as a linear combination ofthe K,T and K,I constituents, or m mathematical terms as
  • K K,T + K.I + K Eq. 3
  • K is a constant
  • regression analysis refers to a well-known mathematical methodology of relating observed variations m a quantity or variable to variations in other quantities or variables
  • One specific type used in the exemplary embodiment is least-mean-squares regression analysis.
  • the market data can be accessed or generated in any number of ways, for example, via a computer link to an on-line database
  • the model can be used to project or estimate a new market value based on investment or divestment in the tangible or intangible business item (which is representative of an asset or operational decision). For example, one can double the value of investment into both of the tangible and intangible business assets and compute the new market value based on the determined or selected modeling parameters.
  • Graphs of these market value trajecto ⁇ es can easily be developed using any number of o ⁇ gmal or off- the-shelf computer software tools.
  • the inventors use ITHINKTM visual dynamics and visual simulation software and a conventional personal computer. ITHINK software is available from High Performance Systems, Inc. of New Hampshire.
  • the inventors model the market value MV of a business as a function of physical, financial, employee, and customer business items. Mathematically this is expressed as
  • MV f(P, F, E, C) Eq. 4
  • P denotes a single or aggregate business item from the physical asset category
  • F denotes a single or aggregate business item from the financial asset category
  • E denotes an a single or aggregate business item from the employee asset category
  • C denotes a single or aggregate business item from the customer asset category
  • the inventors model the market value MV of a business as
  • MV f(K,F, K 2 P, K 3 E, K 4 C) Eq. 5 where K, - K 4 are weighting factors.
  • K, - K 4 are weighting factors.
  • a particular implementation of this model treats the market value MV as a linear combination of these four constituents, or mathematically as
  • K K,F + K 2 P + K 3 E + K 4 C + K Eq. 6
  • K is a constant.
  • the model can be used to project or estimate a new market value based on investment or divestment m any one or more ofthe asset categories as represented by its business item Moreover, one can also develop a market value trajectory for a given investment or divestment strategy for each category of the business items Similarly, one can also randomly dither or otherwise temporally vary one or more of the model parameters and graph market value trajectories
  • ASSETS denotes value of total assets from a balance sheet
  • CASHST denotes value of cash and short-term investments
  • PPLANT denotes net total property, plants, and equipment
  • EMPLOYEE denotes the number of employees
  • SGAEXP denotes selling, general, and administrative (SG&A) expenses
  • INTANG is value of intangibles.
  • p ⁇ ce-to-earnings ratio as the market value parameter for the regression analysis.
  • One exemplary set of software tools for performing the regression analysis is the FAME 7 7 software for Windows NT 4.0, and another is FAMES native 4GL software.
  • An exemplary source for data on which to base the regression analysis is Standard & Poors Compustat annual fundamentals, stored in FAME databases
  • the Compustat database includes income statement, balance sheet, and cash flow data items for more than 10,000 companies, with annual history dating from 1978.
  • the databases offer both a time series and a cross-sectional perspective of the economy, facilitating both historical and snapshot (at a given year end) regression analysis. (See Appendix A for a catalog of data items m this database )
  • the invention is not limited to any particular genus or species of database
  • m reality businesses comprise interdependent relationships not only between one business asset (or item) category and another business asset category, for example, the financial and customer catego ⁇ es, but also among two or more items of a given asset category, such as a decision to sell information about customers and the number of total customers.
  • the interactions or mterdependencies of these elements create positive and negative feedback relationships which are not immediately apparent m the models represented in equations 1-7.
  • the inventors model market value using conventional systems dynamics methodologies and a set of twelve business items representative of the four (PFEC) catego ⁇ es.
  • Figure 6 shows a simplified stock-and-flow diagram which defines the form of a computer- implemented systems dynamics model of the engine of Figure 5
  • the exemplary embodiment uses the concepts and tools of system dynamics to articulate and exercise the following four key principles:
  • the exemplary embodiment is further grounded in the assumption that firms transact m the four distinct, but interdependent, asset markets discussed earlier: Financial; Physical; Employee (Provider); and Customer. In each market category, the firm engages in a se ⁇ es of two-way exchanges to secure and leverage the assets that determine its market value.
  • this section explains the principle of multi-market exchange by first examining the four market sections depicted m Figure 6 and then explains, at least in part, their cross-market mterdependencies.
  • the key relationship is that of the firm to its investor. This two-way relationship hinges on a firm's ability to attract capital from its investors, a subset of the investing public. The investors provide the firm cash to expand, and in return, the firm offers financial investment products, debt, equity, or some combination m between to investors. At least two enabling factors affect the efficiency of this relationship: the quality and convenience ofthe cash flows the firm produces Properly regulated, these factors enhance the efficiency and effectiveness of capital flows mto and out of the firm.
  • Figure 6 also shows that a business interacts with a physical market to regulate its physical asset holdings.
  • the business after acqui ⁇ ng capital from investors, traditionally has entered into a relationship with one or more natural resource markets to acquire or build physical assets.
  • the business In its two-way relationship with this asset market, the business ordinarily exchanges dollars, or capital, for fixed physical assets, which supports its capacity to produce goods and services. Enabling factors, which are often reflected in specific business operating decisions and related information, in this relationship are based upon technology and process knowledge. New technology allows for a more efficient use of dollars throughout the business, and process knowledge, on the other hand, allows the business to use all assets more effectively, for example, to reduce production costs and/or to increase production rates.
  • Figure 6 also shows a third important relationship, the two-way relationship of a business to its employees or providers.
  • the employees provide labor, time and ideas m exchange for dollars and benefits These include not only the traditional benefits, such as health insurance, paid vacation, and so forth, but also benefits such as training and networking. These benefits in turn enable the enterprise to be more effective in the marketplace. Enablers for this relationship include the firm's ability to tram new employees, and the size ofthe its supplier network.
  • the supplier network includes both the suppliers to the firm and the firm's alliance partners. These relationships enable it to draw upon the contacts of a larger network, which in turn facilitates finding and hiring new employees. Likewise, potential employees will be attracted to firms that provide a large network of contacts. This becomes a ⁇ ch source of both new ideas and future leads and contacts.
  • Figures 7A-7D shows interactions among the different asset markets and catego ⁇ es, implicit to the elementary stock-and-flow diagram of Figure 6. More specifically, Figures 7A-7D shows a detailed stock-and-flow model 510 which describes mathematical dependencies of various business items in the financial, physical, employee, and customer asset categories. The nomenclature or vocabulary of stocks and flows is known; so a detailed explanation is not included here.
  • the diagram graphically represents a set of simultaneous equations, with variables in one equation affecting variables m other equations.
  • Figure 8 the mathematical equivalent of Figure 7, shows some of these equations. These equations are implemented by a systems dynamics module of engine 510 (shown in Figure 5.)
  • the exemplary embodiment of the invention implements this model using ITHINK visualization and simulation software.
  • the invention is not limited to this genus or species of software platform; indeed, other embodiments of the invention can be developed on other commercial systems, dynamics software platforms, or as specific PC or web-server-based application programs for a vanety of operating system environments.
  • Section 4 Visual Displays Based on Asset Classification
  • Figures 9-25 show va ⁇ ous visual representations of business valuation information produced by the engine of Figure 5
  • Figure 9 shows a unique two-dimensional rendering of tetrahedronal graphic aid 910 showing the relative contribution of physical, financial, employee, and customer assets to the market value of a number of publicly traded companies.
  • the exemplary embodiment represents market value using return on investment over a one-, five-, or ten-year period.
  • graphic aid 910 includes four independent axes: a physical axis, a financial axis, an employee axis, and a customer axis.
  • Each axis has a scale ranging from zero at its intersection with the other axes to a maximum value.
  • engine 510 uses equation 7 and regression analysis techniques to model the market value of each of a number of publicly traded companies for a particular year. These weighting factors K, - K 4 are then taken as indicators of the relative contribution of each asset to the market value and plotted on the four tetrahedronal axes.
  • One technique for rendering the four- dimensional plot m two dimensions is to compute the average of specific pairs of the four weighting factors and to thus reduce the four tetrahedronal coordinates to two planar coordinates.
  • Figure 10 shows an exemplary three-dimensional rende ⁇ ng of a unique tetrahedronal graphic aid 1010 showing the relative contribution of physical, financial, employee, and customer assets to the market value of clusters of publicly traded companies having similar relative asset cont ⁇ butions to market value.
  • Neural network technologies are employed by engine 510 to determine clustering of the weighting coefficients.
  • this embodiment can display one or more company names next to their associated clusters
  • Figure 1 1 shows rotation ofthe unique four-dimensional tetrahedronal graphic aid of Figure 10 Through a graphical user interface to engine 510, a user interacting with the tetrahedron rotates it to gam additional insight into the relative value contribution of each asset on the market value of a cluster of companies. Though not visible in Figures 10 and 1 1, the exemplary embodiment provides color coding of the points to indicate relative or absolute market value of the cluster Individual cluster metrics, statistics, and member businesses can be accessed by "double-clicking" on a particular cluster
  • Figure 12 shows an exemplary heat map graphic aid 1210 which indicates the relative contribution of physical, financial, employee, and customer assets to the market value of clusters of publicly traded companies having similar relative asset cont ⁇ butions to market value
  • heat map 1210 in this embodiment includes a ten-by-ten grid or matrix of squares, with the position of each square representing a particular combination of weighting factor ranges The correlation of ranges to square position is based on a four-axes arrangement similar to that shown m Figure 9
  • heat map 1210 is a "smeared” and "flattened” version of the tetrahedronal graphic aid shown in Figure 10
  • Each square has a color and/or tone indicating the relative market value of its associated cluster of companies or that it has no associated cluster of companies
  • a graphical user interface one can select one ofthe squares to view (or to otherwise analyze or direct computer operations on) the members of its associated cluster
  • the system allows one to select one or more of the constituent firms and to view corresponding pie charts that show relative contribution of the selected firm's physical, financial, employee, and customer assets to its market value.
  • Figure 13 shows a pie chart for a selected company below a pie chart representing the average distribution of market value for members of the selected cluster.
  • other embodiments permit a side-by-side nume ⁇ c as well as pie chart compa ⁇ sons
  • the exemplary embodiment also allows one to view the relative cont ⁇ bution of each asset category using unique aids or displays like those depicted m Figures 15-25.
  • Another feature not explicitly shown is that, again with the aid of a graphical user interface, one can invoke a three-dimensional rendering of the heat map that shows the relative market values of each square of the map, which in essence is a "city scape" view of the map Market value components, for example, the physical or customer components, can be similarly viewed
  • Figure 14 illustrates a strategic tracking feature of heat map graphic aid 1210. More precisely, the heat map (and also the tetrahedronal graphic aid) can be used to track the changes m the weighting factors for one or more selected companies In doing so, the system correlates each set of weighting factors for a time-specific market value to a position on the heat map and marks the position, thereby creating a trail showing to some degree the strategic operating decisions of a firm, particularly those strongly affecting its physical, financial, employee, and customer assets Figure 14 shows the trail as a dashed line.
  • a user can select a point on the trail to determine not only the associated time and weighting factor values, but also to direct the system to correlate the point with relevant archival accounting data or news concerning the company, its industry, or the economy in general Further external factors are also available for analysis as potentially affecting the course of the asset values
  • this tracking and histo ⁇ cal data correlation feature allows one greater insight into the strategic thinking and operational behavior of any number of publicly traded companies.
  • Figures 15-26 show other exemplary graphic aids (or displays) in accord with the invention
  • graphic aids which in some embodiments also serve as graphical-user interfaces to accounting or business data derived and/or organized in accord with the invention, rely on color (or other indicia) and spatial arrangement to depict an economic position or market value of a business.
  • the value and thus the area of each component are based not only on business data representative of investments in each of the categories but also on regression coefficients or weights indicative of the contribution of each category of assets to the total market value.
  • the market value and the regions affected by the addition or substraction will illustrate the change through both a change in the affected category and m the total market value
  • each exemplary display includes up to five regions, with each region having a color or other indicia and position (relative the other regions) which identify its associated asset category and an area or size related to the actual or estimated contribution of the associated asset category to the market value of the business.
  • the actual or estimated cont ⁇ bution of each asset category is determined as described above.
  • the total area ofthe aid is substantially proportional in actual and/or apparent area to the market value of the business.
  • each category has a consistent position withm the display.
  • each category has a token place-holder m the display.
  • the token placeholder is an icon, for example, a circle filled in with the color (and/or other indicia) representing the associated asset category
  • add a mnemonic such as alphanumeric character to the circle to further aid comprehension.
  • Figure 15 shows a graphic aid or display template 1500 which as a generally square shape. Aid 1500 has an outer perimeter or periphery 1502 which defines an area representing a market value of a business.
  • Each of the five asset regions has an associated asset category and an area related to the cont ⁇ bution of its asset category to the market value.
  • Each asset region also has a distinctive color (and/or other indicia, such as cross-hatching or other pattern) and position relative to the other regions to identify its associated asset category.
  • Regions 1510, 1520, 1530, 1540, and 1550 are associated with respective asset-category icons (or points of origin) 1512, 1522, 1532, 1542, and 1552, which not only aid in identifying the asset category associated with each region, but also function as placeholders for categories with zero or negative cont ⁇ butions to the market value
  • the exemplary icons are equi-sized circles filled in with the color ofthe associated asset category
  • the icons are mcongruent and/or include mnemonics or alphanume ⁇ c characters to facilitate identification ofthe associated catego ⁇ es.
  • the table below identifies an exemplary arrangement and color coding of the regions
  • each ofthe five asset catego ⁇ es is shown as contributing one -fifth, or 20 percent, ofthe total market value.
  • the angle between the sides of the perimeter 1502 and those of region 1550 is 45°.
  • the relationship between x and y is given by the formula, x - 5y j vhere x denotes the length of the sides of the outer square and y denotes the length of the sides of the inner square, or region 1550
  • the market value is five times the value of the assets associated with asset-region 1550, the center asset region.
  • the total visible area of each region is equal.
  • region 1550 overlaps a portion of each of the other four other regions, so that only three-fourths of the other four regions is visible.
  • the market value display m Figure 15 can be viewed as recording:
  • I an equity subscription comprising assets in each asset category with the same monetary value.
  • V the realization of equal amounts of financial assets from each asset category.
  • the exemplary embodiments uses the following rules to render a display depicting the market value: 1 Render the total market value using a first (or outer) square ⁇ ith side length x
  • center asset category was rendered according to rule 3, render the other four asset regions such that: a) the area of each region, for example, financial, physical, customer, and employee asset regions, is actually or apparently proportional to its respective positive value and connects with its respective icon (points of o ⁇ gm); and b) any border between regions 1510 and 1540 (P and F) or between regions 1520 and 1530 (C and E) is ho ⁇ zontal and any border between regions 1510 and 1520 (P and C) or between regions 1530 and 1540 (E and F) is vertical.
  • Figures 17-19 illustrate application of rule 4
  • Figure 17 shows asset regions 1520 and 1530 as making no contribution to the market value, regions 1510 and 1540 as both making 30% contributions, and center region 1550 as making a 40% contribution.
  • Figure 18 shows asset regions 1510 and 1540 as making 5% cont ⁇ butions to the market value, regions 1520 and 1530 as both making 40% contributions, and center region 1550 as making a 10% contribution.
  • Figure 19 shows asset regions 1510 and 1530 as making 40% contribution to the market value, regions 1520 and 1540 as both making 5% contributions, and center region 1550 as making a 10% contribution.
  • FIG. 20 shows center asset region 1550 as contributing 60% ofthe total market value, and asset regions 1510-1540 as each contributing 10% to the market value.
  • center asset region is rendered according to rule 5 then render the other four regions according to rules 4(a) and 4(b), with one or more of the regions possibly divided into two or more parts separated by one or more portions of the center asset region
  • Figure 21 shows center asset region 1550 representing a contribution of 60%, regions 1520 and 1540 both representing 3% cont ⁇ butions, and regions 1510 and 1530 each representing 17% cont ⁇ butions Regions 1510 and 1530 are each divided into two non-contiguous parts by respective portions of center regions 1550, in accord with this rule.
  • the asset catego ⁇ es has a negative value or negative cont ⁇ bution to the market value, render the positive values or contributions of the other asset categories according to applicable ones of rules 2-6 and render each negative asset region as a square or rectangular (or other regular or irregular) inclusion or indentation in a contrasting or otherwise visible outline of the first square, with the inclusion or indentation o ⁇ ginating from the associated icon (or point of o ⁇ gm) and defining an area actually or apparently proportional to the negative value or contribution of the asset region
  • the area enclosed by the black line represents the total value after allowing for negative items.
  • Figures 22 and 23 show aids which depict market values resulting from positive and negative asset contributions.
  • region 1510 representmg a 30% contribution
  • region s 1520 and 1530 each representmg a 30% contribution
  • region 1540 (shown as an indentation or cutout or notch in pe ⁇ phery 1502) representing a negative or minus 20% cont ⁇ bution
  • region 1550 representmg a 30% cont ⁇ bution.
  • Icon 1542 as well as the position ofthe indentation in the lower left corner identify it as being associated with the financial asset category.
  • Figure 23 shows a market value with regions 1510-1520 each representing 30% contributions and center region 1550 representing a negative 20% contributions.
  • the negative 20% cont ⁇ bution is denoted with a distinctive outline of the center region and an omission of the interior filling.
  • Some embodiments represent a negative contribution as unfilled regions outlined or defined in one or more lines of the relevant color or other indicia associated with the asset category.
  • the total area of the filled blocks represents the total market value including the (one or more) negative cont ⁇ butions.
  • two separate aids, one with positive cont ⁇ butions and the other with negative contributions are presented side by side in some embodiments, with the negative, for example, being distinguished with approp ⁇ ate labeling or with unfilled regions.
  • Figures 24 and 25 further illustrate the explanatory power of graphs made m accord with p ⁇ nciples ofthe present invention
  • Figure 24 shows two displays 2410 and 2420
  • Display 2410 illustrates the conventional accounting practices of computing book value as the sum of physical and financial assets, igno ⁇ ng any cont ⁇ bution from intangible assets.
  • Display 2420 illustrates that actual market value is not only much greater than the book value of a business represented in display 2410, but also accounts for the contributions of previously unreported and unevaluated customer and employee assets.
  • the inventors also view displays 2410 and 2410 has highlighting an economic shift from the industrial age to the so-called information age
  • Figure 25 shows a similar display 2500 which supenmposes a conventional book value (consisting of physical and financial assets) on a market value
  • the space between the pe ⁇ phe ⁇ es ofthe bookvalue and the market value indicate the difference between them.
  • Figure 26 shows four displays 2610, 2620, 2630, 2640 illustrating potentially characte ⁇ stic roles of the five asset catego ⁇ es m cont ⁇ butmg to the market value of business in particular business sectors.
  • Display 2610 shows a market value decomposition for businesses m the service sector;
  • display 2620 shows a market value decomposition for businesses in the financial services sector;
  • display 2630 shows a market value decomposition for businesses in the information services sector;
  • display 2640 shows one for businesses m the manufacturing sector.
  • Value displays of the exemplary embodiment as well as those of other embodiments in accord with the invention have a wide number of uses.
  • a first use is to record the following types of economic events either individually or in combination for any period: equity investment, asset investment, value creation, value reduction, value realization, other value exchanges, and value dist ⁇ bution.
  • the exemplary embodiments assume that there are eight types of economic event which can affect an entity's economic position or market value: I. equity investment, II. asset investment, III. value creation, IV. value reduction, V. value realization, VI. value exchange, VII. value distribution, and VIII. equity exchange.
  • the exemplary embodiment defines an equity investment as any exchange of an asset from any one of the asset categories in exchange for an equity interest m the entity receiving assets.
  • An asset investment occurs when an entity make an investment by providing financial assets to others in exchange for the receipt of assets in any ofthe asset categories.
  • Value creation for an entity occurs when the value of any asset category increases.
  • Value reduction for an entity occurs when the value an asset in any category falls.
  • Value realization for an entity occurs when an entity receives financial assets m exchange for any of its assets
  • Value exchanges other than asset investments and value realizations that involve no financial assets are defined as other value exchanges.
  • Value distribution occurs when an entity distnbutes assets to others without directly receiving any assets in exchange.
  • An equity exchange occurs when a holder of an equity interest in an entity exchange all or a portion of its equity interests for other assets held outside the entity.
  • a second use is to combine economic event types I to VII above for the entire history of an entity to give its economic position at any point in time and show a total entity value for comparison and reconciliation to the value evidenced by equity exchange transactions (economic event type VIII).
  • a related third use is to use these displays to report an entity's economic position and performance to both internal and external users
  • a fourth use is to create displays that provide an alternative presentation of the information presented by entities in the balance sheets and income, cash flow and other statements required under generally accepted accounting principles. For example, one can use the representation principles to represent conventional book value.
  • a fifth use is to present the alternative business model designs (or combinations of assets) that are central to an entity's strategy using relative or absolute asset values
  • a sixth use is to prepare hypothetical and prospective information for internal use by the management of an entity and for use by people external to the entity.
  • a seventh use is to support an entity's strategic decision-making and risk management by modeling the potential impact of events in the entity's economic environment and the entity's own asset management processes on the value ofthe entity.
  • An eighth use is to compare the economic position and performance of different entities or the same entity at different points in time and analyze the differences using value displays.
  • a ninth use is to highlight and analyze differences between the economic position and performance of an entity as evidenced by the entity's own reporting and by the values at which equity exchanges occur.
  • a tenth use is to illustrate gene ⁇ c differences between the business models (or combinations of assets) employed by entities in different industries and m different periods of economic history using relative or absolute asset values.
  • An eleventh use is to present hypotheses ofthe contributions made by different asset categories to the total value of an entity.
  • a twelfth use is to show the evolution of an entity by presenting a time series of ⁇ alue displays in real or accelerated time.
  • Business refers broadly to any operating business such as any commercial, industrial, financial, or service activity in an economy.
  • the term also refers to specific organizations, m the sense of a "business," operating as a "going concern” that manufactures or sells products or services to customers, and generates economic value by maximizing profits and shareholder wealth as opposed to conventional investment management or portfolio management.
  • Equivalent terms used herein include firm and company.
  • Market Value refers to the value of a publicly traded company based on its rice per share multiplied by the total number of shares outstanding For p ⁇ vate companies and non-profit organizations, the term means a reasonable estimate of "implied market value " It also refers to other market-based parameters, such as p ⁇ ce-to-earnmgs (P E) ratio, total shareholder return (return per share times total number of shares) over a defined period, market-to-book (M/B) multiple, or any other indicator of economic value of a business or a component or division of a business.
  • P E p ⁇ ce-to-earnmgs
  • M/B market-to-book
  • Business item refers to any data or information that can be nume ⁇ cally represented and that can be shown to be statistically significant or otherwise relevant to the market value of a business.
  • Business items can be assets, liabilities, or hybrid asset-liabilities which behave as assets under certain circumstances and as liabilities under others
  • Business items can be fixed or variable For examples of actual or potential business items, see Appendix A
  • Tangible Business Item refers to any data or information concerning financial capital and physical assets, such as inventory, property, plants, and equipment, which are conventionally listed or reported on a balance sheet pursuant to Generally Accepted Accounting Principles (GAAP). Tangible business items include both current and non-current physical and financial assets. Certain types of physical and financial assets, like inventories and accounts receivable, are defined as current because of the expectation that they will be converted to cash withm a given operating year or operating period. Other tangible assets, like property, plant, and equipment that are used for longer periods of time, are generally defined as non-current.
  • Intangible Business Item refers to any business item that is not a tangible business item.
  • intangible assets include customers, existing customer relationships, knowledge of customers, employees, existing employee relationships, knowledge of employees, organizational knowledge, ability to perform processes, brand or trademark strength, research and development
  • the term intangible asset also generally encompasses business items which are not typically reported or quantified as assets on conventional balance sheets or which are considered as contributing to "goodwill.”
  • GAP accounting rules
  • goodwill generally recognized only at the time of a business acquisition, is the amount paid for a business m excess of the fair market value of its (tangible) assets, minus any liabilities assumed m the acquisition.
  • Physical Assets includes business items related to physical business resources Examples include physical assets such as inventory, property, plant, and equipment More generally, the physical assets category encompasses fixed assets Property, Plant and Equipment (PP&E) - which are depreciated using va ⁇ ous depreciation methods and depreciation schedules, and short-term physical assets, or inventory
  • PP&E Plant and Equipment
  • physical assets and their associated liabilities relate to an organization's infrastructure to acquire, manufacture, or dist ⁇ bute raw mate ⁇ als and finished products.
  • Physical business items also characterize a company's ability to secure raw mate ⁇ als cost effectively, its production capacity, and its management of finished goods and distribution.
  • Financial Assets includes business items related to assets and liabilities associated with financial position, such as accounts receivable, accounts payable, cash on hand, mortgages,. Specific examples of financial assets include a company's financial base (that is, the number of investors, their propensity to invest more in the business and the company's relationships and communications with them). It also includes cash and cash reserves, operating capital, marketable secu ⁇ ties and other financial instruments (Financial asset refers debt, equity, cash flow.)
  • Assets comp ⁇ ses business items related to individuals and entities involved in producing and distributing the products or services of a business.
  • the category thus includes not only the company's management team and employees, but also suppliers-alliance partners and their management and employees. This category also comp ⁇ ses brands created, and the intellectual capital and intellectual property supporting the processes of a business.
  • the category also includes assets and associated liabilities in an in-bound supply chain for a business — in other words, what is required to produce its products or services, as well as the offering itself. Information concerning labor costs and statistics is also included in this category
  • Customer Assets includes business items related to individual and business buyers and channels of dist ⁇ bution, which include the va ⁇ ous ways that companies deliver products and services to customers (for example, physical outlets or storefronts, telephone sales, direct mail, Internet sales, and so forth).
  • the customer assets category contains assets and associated liabilities ofthe out-bound supply chain, including market share and sales and dist ⁇ bution partners.
  • the asset category also captures factors related to the strength of a company's relationships with customers in terms of repurchase behavior. And it includes as an asset a company's ability to leverage its customers, to use information about customers to encourage more purchasing, and to improve or expand product and service lines to gam market share
  • Appendix B Exemplary Asset- weighting Questionnaire and Assessment Procedure
  • Appendix C Va ⁇ able Definitions and Equations for Exemplary System Dynamics Model m Figures 6 and 7
  • Appendix A Table Illustrating Exemplary Classification of Business Data and Exemplary Catalog of Business Data
  • MMS SALESR Sales (Restated) MMS SPSIN Secondary S&P Index Identifier SGAEXP Selling, General, Administrative Expenses MMS SGAEXPR Selling, General, and Administrative Expenses (Restated) MMS DEBTSTAIR Short-Term Borrowings- Average Interest Rate %DEBTSTAVG Short-Term
  • Scoring reflects a measure of "goodness” or “effectiveness” in each of these categories on the scale of "0" to "10 " Assessing the number of investors, for example, does not involve an actual count of investors. Rather, it compares the effectiveness or "goodness” of the investor base of both companies in terms of size.
  • An Asset Map is scored for a target business entity and optionally a benchmark company across 20 questions.
  • the following summary includes: 1) the data field/row or area of investigation, 2) the question to ask of yourself and the benchmark; 3) common measures that provide performance information on this element of value; and 4) a short description of issues related to it.
  • Section B 1 Financial Assets Data Field: Number of active investors Question: How many active investors do you have? Measures: Number of entities and individuals that bought shares in last 12 months. In the case of a public company, assess your total shareholder base In the case of a private company, look to your collective sources of capital, including lending institutions, limited partners and other types of equity partners
  • Section B2 Physical Assets Data Field: Security of supply of raw materials Question: Do you have good control of the supply of raw materials?
  • Section B3 Provider or Employee Assets Data Field: Management expertise
  • a company requires a workforce that is appropriate m size - not too large or small. Appropriateness of size, for example, requires a balance between "lean” and sufficient elasticity to respond to change.
  • the product and service offerings become an asset or liability depending on such factors as suitability, pricing to market, appropriateness for task (e.g., fit for pu ⁇ ose), and customer/market perceptions of all of these factors. Score this category according to the collective strength or weakness of these factors.
  • Measures % of customers satisfied on first call. Level of customer satisfaction. Customer service costs/customer. Employee and customer satisfaction with service processes.
  • Customer service includes the company's culture of service, training, information systems used to support it and the effectiveness of using information to improve customer service processes.
  • the breadth and depth of customer service processes and the information system are important factors in effectiveness.
  • Compensation effectiveness relates to a combination of factors, including salary, bonuses, equity and other forms of ga -sharing that motivate performance and align the goals of individuals and the company. Effectiveness of compensation is reflected in employee loyalty and turnover rates, as well as recruiting and retraining costs Productivity levels by mdividual/teams may be a useful, indirect measure
  • In-bound partners include all those companies and individuals who support the production of products or services. In-bound partners, for example, would include a company's major suppliers They also include services, like an accounting firm or management consulting advising on internal processes. Ask to what degree and depth a company makes use of these relationships. In the case of an accountant, for example, ask if that person is simply used for routine bookkeeping or tax work? Or does the company leverage that person's knowledge m more depth to support value creation?
  • Section B4 Customer Assets Data Field: Number of customers Question: How many active customers do you have? Measures: # of customers purchasing m the last year.
  • Measurements include numbers of customers and proportion of vital few customers to total customer base.
  • Out-bound partners are all those companies and individuals who support the marketing and sales process m delivering products/services to market They include the channels of distribution, field sales forces of partners or intermediaries, wholesalers, marketing consultants, franchisers, and advertising, public relations and marketing firms Effectiveness of cross-selling strategies to amplify the impact of sales forces is one example of strength this area Strategic marketing of products/services of two companies to increase value with more comprehensive offerings to customers is another Developing formal "feedback" processes to capture knowledge of wholesalers and other intermediaries about the marketplace also reflects a company's propensity to leverage out-bound partners
  • Weighted Averages An additional exercise involves a self- weighting of assets on their relative important to the total value of each category. For example, some assets overlap in value with others, or are of less significance to the total. To weight scores, assign weighting of 100 to the most important asset in each of the four categories. Then assign appropriate weightings to the remaining items to represent their significance relative to the top item. You can then calculate a "weighted average" by multiplying the scores by their weighting, then dividing by the number of assets to obtain the average for each ofthe four categories - Financial, Physical, Provider and Customer.
  • Calibration An additional exercise involves a self-calibration of assets on their relative important to your company or marketspace For example, some companies require large numbers of customers to sell volume to. The number of customers is thus more important than to another company that focuses on a vital few.
  • To calibrate scores assign calibration of 100 to the most important asset m each of the four categories. Then assign appropriate calibrations to the remaining items to represent their significance relative to the top item. You can then calculate a "calibrated weighted average" by multiplying the scores by their weighting and by their calibration, then dividing by the square of the number of assets to obtain the calibrated average for each of the four categories - Financial, Physical, Provider and Customer
  • Section B Asset Category Averages
  • BE Best Estimate (variable that is not captured and/or measurable; proxy unlikely; correlation analysis may be useful)
  • base_KoC_per_trans This is the base amount of Knowledge BE action of Customers gained per transaction.
  • the quality of the firm's Customer Support Technology modifies this factor to determine the actual amount of knowledge gained per transaction.
  • base PE mult The base price to earning ratio of the CR firm.
  • base worn The base word of mouth' multiplier (i.e., BE number of new Customers each current Customer 'recruits' per unit of time). This number is modified by several other factors to determine the actual 'worn mult'. book value The equity of the firm, in millions of CR dollars.
  • Brand_building_from The rate at which Brand recognition is X _brand_spending built as a result of spending on Brand- building.
  • Brand_building_from This is the rate at which Brand ND sales recognition is built as a result of selling the product.
  • Brand_built_per_$ The non-linear degree to which the rate ND, BE of Brand-building per $k spent depends on Knowledge of Customers. Firm's with a low Knowledge of their Customers will gain less brand recognition per $k spent than firm's with a high Knowledge of their Customers.
  • CST _obsolescing The rate at which Customer Support ND, BE Technology obsolesces or otherwise loses its functional value. cust loss frac The fraction of current Customers lost CR, BE per unit of time. This fraction decreases non-linearly as the firm's Knowledge of its Customers increases, debt service The amount of interest accumulated by CR the current Debt per unit of time. delivering_by_internal The rate at which the firm delivers CR, BE units. delivehng_by_networ The rate at which the supplier network CR, BE k delivers units. earnings_from_sales The revenues from selling Knowledge CR, BE of KoC of Customers per unit of time.
  • Fixed Asset shortfall The shortfall in amount of Fixed Assets CR necessary to eliminate the sales backlog. fixed costs The cost of maintaining the current CR base of Fixed Assets. gaining_Customers The rate at which the firm gains new CR customers. gross_earn ⁇ ngs The gross earnings of the firm, CR measured in dollars per year. impact_of_Brand_on The impact of Brand recognition on the BE worn 'worn mult.' impact_of_CST_on_ The impact of the firm's Customer BE KoC_per_transaction Support Technology on the Knowledge of Customers gained per transaction. impact_of_cust_relati The non-linear impact of the firm's BE ons Knowledge of Customers on the number of units demanded per customer per time.
  • impact_of_KoC_on_ This determines the impact that the BE worn firm's Knowledge of Customers has on the 'worn mult.' impact_of_lead_time The non-linear impact that lead time BE on sales has on the number of units demanded per customer. As the lead time increases, Customer tend to order fewer units each per unit of time.
  • Alliance_Partners(t) Alliance_Partners(t - dt) + (change_in_AP) * dt
  • DOCUMENT The number of Alliance Partners the firm has.
  • Avg_Deliveries(t) Avg_Deliveries(t - dt) + (chg_avg) * dt
  • DOCUMENT The average rate of delivery of goods by the firm and its Supplier
  • Backlog(t) Backlog(t - dt) + (transactions - delivering_by_network - delivering_by_intemal) * dt
  • DOCUMENT The number of units which have been ordered but not yet delivered.
  • Brand(t) Brand(t - dt) + (Brand_building_from_sales +
  • DOCUMENT This is the amount of Brand recognition of the product.
  • DOCUMENT The number of Customers who purchase from the firm.
  • DOCUMENT The quality of the firm's Customer Support Technology.
  • Debt(t) Debt(t - dt) + (acquiring_debt) * dt
  • DOCUMENT The amount of Debt currently held by the firm.
  • DOCUMENT The number of Employees in the firm.
  • Fixed_Assets(t) Fixed_Assets(t - dt) + (adding_Fixed_Assets - losing_Fixed_Assets) * dt
  • DOCUMENT The amount of Fixed Assets owned by the firm.
  • Knowledge_of_Customers(t) Knowledge_of_Customers(t - dt) +
  • DOCUMENT The level of knowledge the firm has about its customers wants, needs, and desires.
  • Natural_Resources_Available(t) Natural_Resources_Available(t - dt) + (- adding_Fixed_Assets) * dt
  • DOCUMENT The amount of Natural Resources available for producing Fixed
  • Supplier_Network(t) Supplier_Network(t - dt) + (building_supplier_network - losing_supplier_network) * dt
  • DOCUMENT The number of Suppliers to which the firm can outsource to supply its product.
  • Working_Public(t) Working_Public(t - dt) + (losing_Employees - attracting_Empioyees) * dt
  • DOCUMENT The number of potential Employees who are not currently employed by the firm.
  • DOCUMENT The rate of spending on building Brand name.
  • DOCUMENT The rate of spending on Customer Support Technology.
  • DOCUMENT This element equals '1' if the firm does not engage in outsourcing activities, '0' otherwise.
  • DOCUMENT The ability of the firm to attract and retain Employees.
  • acquiring ⁇ paying_down_capital acquiring_debt+buying_back ⁇ selling_equity
  • DOCUMENT The rate, in dollars per year, at which capital is acquired or paid down.
  • DOCUMENT The equity of the firm, in millions of dollars.
  • Brand_building_from_brand_spending Brand_spending*Brand_built_per_$ DOCUMENT: The rate at which Brand recognition is built as a result of spending on Brand-building.
  • Brand_building_from_sales 5 * transactions/20000 DOCUMENT: This is the rate at which Brand recognition is built as a result of selling the product.
  • DOCUMENT The non-linear degree to which the rate of Brand-building per $k spent depends on Knowledge of Customers. Firm's with a low Knowledge of their Customers will gain less brand recognition per $k spent than firm's with a high Knowledge of their Customers.
  • building_supplier_network (Alliance_Partners+Supplier_Network) * suppliers_added_per_Supplier_or_AP_per_time
  • DOCUMENT The rate, measured in dollars per year, at which equity is bought or sold.
  • cap_adjust Fixed_Asset_shortfaH*Traditional_Firm
  • cap_util GRAPH(lead ime)
  • DOCUMENT The amount of interest accumulated by the current Debt per unit of time.
  • delivering_by_internal Fixed_Assets * cap_util DOCUMENT: The rate at which the firm delivers units.
  • delivering_by_network min(Fixed_Asset_shortfall,Supply_from_Network)
  • DOCUMENT The rate at which the supplier network delivers units.
  • eamings_from_sales_of_KoC (selling_KoC*margin ⁇ unit_of_KoC_sold)
  • DOCUMENT The revenues from selling Knowledge of Customers per unit of time.
  • DOCUMENT The combined value of the firm's physical and financial assets minus the amount of Debt held by the firm.
  • impact_of_cust_relations GRAPH(Knowledge_of_Customers) (0.00, 0.4), (10.0, 0.625), (20.0, 1.00), (30.0, 1.38), (40.0, 1.73), (50.0, 2.10), (60.0, 2.43), (70.0, 2.68), (80.0, 2.85), (90.0, 3.00), (100, 3.00) DOCUMENT: The non-linear impact of the firm's Knowledge of Customers on the number of units demanded per customer per time.
  • impact_of_KoC_on_wom GRAPH(Knowledge_of_Customers)
  • impact_of_supplier_network_on_wom_mult GRAPH(Supplier_Network/10000) (0.00, 1.00), (1.00, 1.00), (2.00, 1.16), (3.00, 1.31), (4.00, 1.46), (5.00, 1.59), (6.00, 1.71)
  • DOCUMENT The impact of the Supplier Network on the 'worn mult'. In other words, the ratio of the 'worn mult' to what the 'worn mult' WOULD BE in the absence of a Supplier Network.
  • impact_on_PE_mult GRAPH(tot_inv)
  • DOCUMENT The rate at which Customer Support Technology is improved by the firm.
  • DOCUMENT The rate at which the firms knowledge of its Customers becomes obsolete or otherwise worthless.
  • KoC_per_transaction base_KoC_per_transaction * impact_of_CST_on_KoC_per_transaction
  • DOCUMENT The average time that elapses between the sale of a unit and the time of its delivery.
  • losing_Customers Customers*cust_loss_frac*1.15 DOCUMENT: The rate at which the firm loses Customers.
  • losing_Employees (0.2/Ability_to_Attract_&_Retain) * Employees DOCUMENT: The rate at which the firm loses Employees.
  • losing_Fixed_Assets Fixed_Assets/10
  • DOCUMENT The gross revenues (earnings) of the firm minus the firm's spending.
  • PE_mult base_PE_mult * impact_on_PE_mult
  • DOCUMENT The actual PE ratio of the firm.
  • DOCUMENT The combined value of the firm's physical and financial assets.
  • DOCUMENT The value of all physical assets owned by the firm.
  • potential_selling_of_KoC GRAPH(Knowledge_of_Customers)
  • DOCUMENT The number of dollars earned per dollar value of each unit sold.
  • DOCUMENT The number of new Suppliers each current Supplier or Alliance
  • DOCUMENT The capacity the Supplier Network has to supply units to the firm's
  • DOCUMENT The total number of 'market value'-building activities engaged in by the firm.
  • total_deliveries delivering_by_internal + delivering_by_network DOCUMENT: The total rate at which units are delivered to Customers by both the firm and the supplier network combined.
  • transactions Customers * units_demanded_per_cust DOCUMENT: The rate at which units are sold.
  • u n i t s _ d e m a n d e d _ p e r _ c u s t
  • PR Public Records includes industry averages
  • BE Best Estimate variable that is not captured and/or measurable; proxy unlikely; correlation analysis may be useful
  • X Not applicable to this embodiment or involves direct user input
  • Fixed__Asset_utilizati The percent utilization of Fixed Assets CR on owned. fixed costs Costs assessed each time period on CR the firm's Fixed Assets. frac Rwl lost Fraction of Relationship with Investors ND, BE lost each time period. gaining_Contacts When a supplier comes on board, they ND, CR bring with them a certain number of contacts the firm will be able to use. gaining_Customers The amount of new customers gained CR over a given time period. The process is a word of mouth process. The more effective the firm is at developing brand recognition, the supplier networks, customer knowledge, and customer relationships, the more customers it can gain. Loyal Customers are assumed to have a higher word of mouth multiplier than New Customers.
  • impact_of_AAR_on The impact of the ability to attract and BE retention retain on keeping Experienced Employees. The greater the ability, the easier it is to retain them.
  • impact_of_AP_on_s The impact of the Alliance Partners on BE up the ability to add suppliers. The more Alliance Partners, the easier it is to add suppliers.
  • INIT Ability_to_Attract_&_Retain 0DOCUMENT: The ability of the firm to attract new employees and keep current employees. This is on a scale of 0 (no ability whatsoever) to 100 (couldn't be more able to).
  • DOCUMENT The ability of the firm to raise capital and make deals happen.
  • Ability_to_Train(t) Ability_to_Train(t - dt) + (changing_training_ability) * dt INIT
  • Ability_to_Train 50DOCUMENT: The ability of a firm to train its employees. It is on a 0 (it can't train) to 100 (couldn't be more able to train) scale.
  • Alliance_Partners(t) Alliance_Partners(t - dt) + (change_in_AP - losing_APs) * dt
  • INIT Alliance_Partners 100DOCUMENT: Number of strategic partners for R&D, marketing, etc.
  • Brand(t) Brand(t - dt) + (brand_building - brand_decaying) * dt
  • INIT Brand 20DOCUMENT: Measures brand recognition on a scale of 0-
  • Buying_Public(t) Buying_Public(t - dt) + (losingjoyals + losing_new_custs - gaining_Customers) * dt
  • INIT Buying_Public 10000DOCUMENT: The total buying population that is not currently a customer of the firm.
  • Channels(t) Channels(t - dt) + (adding_Channels - losing_Channels) * dt
  • DOCUMENT The number of channels a firm has.
  • Cume_Transaction_Data(t) Cume_Transaction_Data(t - dt) + (acquiring_transaction_data) * dt
  • Customer_Relationship(t) Customer_Relationship(t - dt) + (building - weakening) * dt INIT
  • Customer_Relationship 50DOCUMENT: Measures strength of customer relationship on a scale from 0-100%.
  • Fin_Asset_$_Val(t) Fin_Asset_$_Val(t - dt) + (gross_earnings + acquiring ⁇ paying_down_capital - capital nvestment - spending) * dt
  • INIT Fin_Asset_$_Val 1 e6DOCUMENT: Total financial assets of the firm.
  • Fixed_Assets(t) Fixed_Assets(t - dt) + (adding_Fixed_Assets - losing_Fixed_Assets) * dt
  • INIT Fixed_Assets 20000DOCUMENT: Measure of functional, on-line capital goods used to make finished units.
  • Inventory(t) lnventory(t - dt) + (producing_by_internal + producing_by_network - transactions) * dt
  • INIT Inventory ODOCUMENT: Amount of finished goods available for delivery.
  • lnvesting_Public(t) lnvesting_Public(t - dt) + (losingjnvestors - attractingjnvestors) * dt
  • INIT lnvestment_Transaction_Data ODOCUMENT: The amount of relevant transaction data a firm holds.
  • Knowledge_of_Customers(t) Knowledge_of_Customers(t - dt) + (building_KoC - KoC_obsolescing) * dt
  • INIT Knowledge 3f_lnvestors ⁇ Place initial value here... ⁇ DOCUMENT: The Knowledge of Investors a Firm has. This is on a 0 (no knowledge) to 100 (omniscient) scale.
  • Loyal_customers(t) Loyal_customers(t - dt) + (becomingjoyal - losingjoyals) * dt
  • INIT Loyal_customers ⁇ Place initial value here... ⁇ DOCUMENT: The number of customers who have been with the firm long enough to be considered loyal customers. Loyal customers are considered a significant asset to the firm.
  • Natural_Resources_Available(t) Natural_Resources_Available(t - dt) + (- adding_Fixed_Assets) * dt
  • Network_Contacts(t) NetworkjContacts(t - dt) + (gaining Contacts - losing Contacts) * dt
  • INIT NetworkjContacts ⁇ Place initial value here... ⁇ DOCUMENT: Contacts gained and lost through the Supplier Network.
  • New_Customers(t) New_Customers(t - dt) + (gaining Customers - becomingjoyal - losing iew -usts) * dt
  • DOCUMENT The total amount of knowledge the firm has concerning it processes, customers, and investors.
  • Outstanding Shares(t) Outstanding_Shares(t - dt) + (sellingjshares - buyingj ack) * dt
  • DOCUMENT Outstanding shares that have been sold to the market.
  • Processj nowledge(t) Processj nowledge(t - dt) + (building_PK +
  • DOCUMENT The amount of Process Knowledge a firm has about its core processes.
  • ProductionjData(t) Production_Data(t - dt) + (acquiring_PD) * dt
  • DOCUMENT Data collected regarding a firm's production experience.
  • Relationship vithjnvestors(t) Relationship_with_lnvestors(t - dt) +
  • DOCUMENT The strength of the firm's relationship with its investors. It is on a 0 (no relationship) to 100 (couldn't be stronger) scale.
  • RequestsjBacklog(t) Requestsj3acklog(t - dt) + (buildingj acklog - delivering - losingjjnfilled j-equests) * dt
  • SupplierjNetwork(t) Supplier_Network(t - dt) + (buildingjsupplier_network - losing supplierj ⁇ etwork) * dt
  • Working_Public(t) Working_Public(t - dt) + (losingj ⁇ mployees - attracting) * dt
  • CST_spending lndicated CST_Spending * CST_Spending_switch DOCUMENT: Spending on Customer Support Technology for a given time period.
  • customerjnvesting brand spending+channeljspending+CST spending DOCUMENT: Total amount of investment in the customer sector.
  • debt_equity_ratio ⁇ Place right hand side of equation here... ⁇ DOCUMENT: This is the debt equity ratio the firm can choose.
  • DOCUMENT This is a switch signifying a firm's decision to sell units of
  • DOCUMENT The price the firm charges for each transaction.
  • sellingjshares capitalj ⁇ eeded * (- debt_equity_ratio)/effectivej rice_per_share
  • DOCUMENT The amount of shares sold by the firm in a given time period.
  • supplierjnvestment ⁇ Place right hand side of equation here...
  • DOCUMENT The amount of investment in the supplier network for a given time period (in dollars).
  • tech_spending ⁇ Place right hand side of equation here... ⁇
  • DOCUMENT The amount of investment in technology requested in a given time period.
  • DOCUMENT The total amount the firm could produce if necessary.
  • acquiring ⁇ paying_down_capital DOCUMENT: The net acquiring and paying down of capital.
  • acquiring ⁇ payingJransactions borrowing/10 + buying J->ack/10 + paying down/10 + selling _shares/10
  • DOCUMENT The number of transactions calculated from acquiring and paying down capital. This is used to determine how much transaction data is gathered over a given time period.
  • acquiring_PD producing_byj ' nterna PDjper_unitjproduced
  • DOCUMENT The rate at which Production Data is acquired each time period.
  • acquiring Jransactionjdata transactions * TD_gained_perJransaction DOCUMENT: The amount of transaction data acquired in a given time period.
  • adding_Channels channel 3pending * cj er $ * impact Df_ARCDD Dn_ch * impact_of_SN 3n_ch
  • DOCUMENT The amount to deliver is determined through analyzing the
  • attracting investing Jnj3mployees*base 3mpj er $ * impact Df_AAR_on attracting DOCUMENT: The amount of new employees the firm attracts over a given time period.
  • attractingjnvestors lnvestors*base attract_womJrac * impact_of_RljDn attracting DOCUMENT: The number of Investors a firm attracts over a given time period. This is done through word of mouth in the marketplace.
  • avg_Fin_A_$ 7al ⁇ Place right hand side of equation here... ⁇ DOCUMENT: The average financial assets.
  • avgjOK 50
  • DOCUMENT The number of Alliance Partners an experienced employee can add to the firm over a given time period. This is more than what a new hire can add.
  • base_APs_added_per_New_Hirej erJime ⁇ Place right hand side of equation here... ⁇
  • DOCUMENT The number of Alliance Partners an experienced employee can add to the firm over a given time period.
  • base 3ttract_womj ⁇ ac GRAPH(net_earnings)
  • DOCUMENT The base word of mouth fraction is determined solely by the net earnings of the firm.
  • base auxjselling ⁇ Place right hand side of equation here...
  • DOCUMENT The normal amount of auxiliary selling.
  • base_CRJ->uilding ⁇ Place right hand side of equation here...
  • DOCUMENT The base loss fraction is determined solely by the net earnings of the firm.
  • basejoyaljossjrac ⁇ Place right hand side of equation here...
  • DOCUMENT The normal percentage of loyal customers the firm would lose each time period if there was no impact of Customer Relationship.
  • basejicjoss rac ⁇ Place right hand side of equation here...
  • DOCUMENT The percentage of New Customers the firm would lose each time period if there were no impact of Customer Relationship.
  • DOCUMENT Base time it takes to adjust the firm's ability to attract and retain to its potential.
  • base imejojaxp ⁇ Place right hand side of equation here...
  • DOCUMENT The average time it takes for a New Hire to become an Experienced Employee.
  • base ime ojoyal ⁇ Place right hand side of equation here...
  • DOCUMENT The average time it takes for a New Customer to become a Loyal Customer.
  • becoming j ⁇ xperienced (New_Hires/baseJimeJo 3xp)*impact -)f_AT DOCUMENT: The number of New Hires who become Experienced Employees in a given time period.
  • becomingjoyal (NewjCustomers/baseJimeJoJoyal) * imp_of_CR_onJimeJoya imp_of_KoC_onJimeJoyal
  • DOCUMENT The number of New Customers who become loyal in a given time period.
  • DOCUMENT This is the cumulative rate of building of Brand recognition.
  • brand j uildingJ ⁇ om_Brand_spending brand_spending*brand -.uiltjper_$k
  • DOCUMENT The amount of brand recognition generated by investing money in developing this recognition.
  • Brand jDuilding_from sales transactions * Brandj uiltjperJransaction
  • Brandj uiltjper $k GRAPH(Knowledge_of_Customers) (0.00, 0.105), (10.0, 0.645), (20.0, 0.945), (30.0, 1.13), (40.0, 1.26), (50.0, 1.35), (60.0, 1.44), (70.0, 1.48), (80.0, 1.53), (90.0, 1.54), (100, 1.58)
  • DOCUMENT The amount of brand recognition built per dollar spent. Knowledge of the customer influences this amount.
  • DOCUMENT Customer Relationship strength is built through interacting with the customer (through employee transactions). The amount this strength is built up is impacted by the number of Channels, the Supplier Network, the amount of transactions, the strength of Brand, and the Customer Support
  • DOCUMENT The amount of units ordered each time period.
  • buildingj oC acquiring Jransaction ata * ease_ofj uilding_KoC * impactj3f_CST_onj oC_ building*impact Df_Relationshipj uilding Dnj oc
  • capitaljnvestment customerj ' nvesting+tech 3pending+FAj ' nvesting_cost+investingj ' nj3mploy ees+supplierjnvestment
  • DOCUMENT Expenditures from investing in customers, providers, and physical assets in a given time period.
  • capitaljieeded ⁇ Place right hand side of equation here... ⁇ DOCUMENT: The firm can analyze its performance and determine what capital (if any) is needed.
  • changej ' n_AP
  • DOCUMENT The number of Alliance Partners added to the firm each time period.
  • changejn_ARCDD (potential_ARCDD- AbilityJo_Raise_Capital ⁇ DojDeals)/timeJo adjust_ARCDD DOCUMENT: The change in a firm's ability to raise capital and do deals. This is determined through a potential (based on Organizational Knowledge) and the amount of time it takes to realize this potential.
  • changej ' nj ⁇ mployees attractingj ⁇ mployees-losingj ⁇ mployees DOCUMENT: The net change in the number of employees for a given time period.
  • changeJnJTD acquiring ⁇ payingJransactions * ITDjperJrans * impact Df_Rl 3n_chgj ' n_ITD DOCUMENT: As a firm acquires and pays down capital, it gathers transaction data.
  • changing_AAR (potential_AAR-AbilityJo_Attract_&_Retain) / (baseJimeJo adj_AAR*impact DfjNC_onJimeJo adjust_AAR)
  • DOCUMENT The amount of investment in developing channels.
  • CR_per ⁇ mployee_per_transaction base_CRjDuilding * impact_ofj3rand_on_CR * impactjDf_CST_onj uild * impac t_ofjC_on_CR*impact Df_SN Dn_CRj3uilding*impact Df_TD DOCUMENT: The amount of customer relationship units gained per employee per transaction.
  • DOCUMENT The amount of Customer Support Technology obsolescing each time period.
  • CST_per_$ ⁇ Place right hand side of equation here... ⁇ DOCUMENT: The units of Customer Support gained per dollar spent.
  • DOCUMENT Technology becomes obsolete.
  • delivering amountJo_deliver
  • DOCUMENT The amount of units delivered each time period.
  • demand unitsj emandedjper_cust * (New_Customers+1.5 * Loyal_customers)
  • DOCUMENT The total units desired per time period. It is a function of the number of customers and the average demand per customer. Loyal customers are assumed to want more in this calculation.
  • earningsJ ⁇ om_sales -if_KoC sellablejjnitsj oC*pricejperjjnit Df_KoCj5old*sell_units
  • DOCUMENT The firm earns money from selling its Knowledge of Customers.
  • ease_of_improvingj3R GRAPH(Customerj elationship) (0.00, 0.04), (10.0, 0.44), (20.0, 1.01 ), (30.0, 1.31 ), (40.0, 1.47), (50.0, 1.51 ), (60.0, 1.46), (70.0, 1.37), (80.0, 1.23), (90.0, 1.01 ), (100, 0.00) DOCUMENT: The greater the customer relationship the firm has with customers, the easier it will be to build increase the relationship-except near the 100% threshold, where it will become increasingly difficult to build a stronger relationship, since the firm already would have such a good relationship.
  • DOCUMENT The amount of new customers gained over a given time period. The process is a word of mouth process. The more effective the firm is at developing brand recognition, the supplier networks, customer knowledge, and customer relationships, the more customers it can gain.
  • imp_of_CR_onJimeJoyal GRAPH(Customer_Relationship) (0.00, 0.34), (10.0, 0.42), (20.0, 0.54), (30.0, 0.68), (40.0, 0.83), (50.0, 1.00), (60.0, 1.13), (70.0, 1.25), (80.0, 1.37), (90.0, 1.43), (100, 1.46)
  • DOCUMENT The impact of Customer Relationship on the time it takes to become loyal.
  • imp DfjKoC GRAPH(Knowledge DfjCustomers)
  • imp_of_Rwlj3nj rice GRAPH(Relationship_with_lnvestors) (0.00, 0.35), (10.0, 0.42), (20.0, 0.54), (30.0, 0.66), (40.0, 0.83), (50.0, 1.00), (60.0, 1.21 ), (70.0, 1.39), (80.0, 1.51 ), (90.0, 1.58), (100, 1.60) DOCUMENT: The impact of the Relationship with Investors on the price per share. The better the relationship, the greater the price per share.
  • impact_of_AAR_on_retention GRAPH(AbilityJo_Attract_&_Retain) (0.00, 0.34), (10.0, 0.42), (20.0, 0.54), (30.0, 0.68), (40.0, 0.83), (50.0, 1.00), (60.0, 1.13), (70.0, 1.25), (80.0, 1.37), (90.0, 1.43), (100, 1.46)
  • DOCUMENT The impact of the ability to attract and retain on keeping Experienced Employees. The greater the ability, the easier it is to retain them.
  • impact_of_APj3n 3up GRAPH(Alliancej°artners)
  • impact_of_ARCDD_on_ch GRAPH(AbilityJo_Raise_Capital ⁇ Do_Deals) (0.00, 0.37), (10.0, 0.45), (20.0, 0.55), (30.0, 0.67), (40.0, 0.83), (50.0, 1.00), (60.0, 1.17), (70.0, 1.32), (80.0, 1.42), (90.0, 1.51 ), (100, 1.57)
  • DOCUMENT The impact of the ability to raise capital and do deals on adding channels.
  • impact Df_ARCDD DnJntj-ate GRAPH(AbilityJo_Raise_Capital ⁇ Do_Deals) (0.00, 0.37), (10.0, 0.45), (20.0, 0.55), (30.0, 0.67), (40.0, 0.83), (50.0, 1.00), (60.0, 1.17), (70.0, 1.32), (80.0, 1.42), (90.0, 1.51 ), (100, 1.57)
  • DOCUMENT The impact of the firm's ability to raise capital and do deals on the interest rate it will be charged on debt. The greater the firm's ability to raise capital and do deals on the interest rate it will be charged on debt. The greater the firm's ability to raise capital and do deals on the interest rate it will be charged on debt. The greater the firm's ability to raise capital and do deals on the interest rate it will be charged on debt. The greater the firm's ability to raise capital and do deals on the interest rate it will be charged on debt. The greater the firm's ability to
  • DOCUMENT The impact of Channels on building Customer Relationship.
  • impactjDfjCRjDn auxjseliing GRAPH(Customer_Relationship) (0.00, 0.12), (10.0, 0.14), (20.0, 0.18), (30.0, 0.34), (40.0, 0.5), (50.0, 1.03), (60.0, 1.45), (70.0, 1.70), (80.0, 1.81 ), (90.0, 1.82), (100, 1.84)
  • DOCUMENT The impact of Customer Relationship on the rate of auxiliary selling. The stronger the relationship, the greater the rate.
  • impact_ofj3R_on_loyal_lossJrac GRAPH(CustotnerjRelationship) (0.00, 1.99), (10.0, 1.68), (20.0, 1.51 ), (30.0, 1.30), (40.0, 1.16), (50.0, 1.00), (60.0, 0.78), (70.0, 0.56), (80.0, 0.45), (90.0, 0.4), (100, 0.39)
  • DOCUMENT The impact of Customer Relationship on the percentage of loyal customers who leave each time period.
  • impactjDfjCR onjicJossJrac GRAPH(Customer_Relationship) (0.00, 1.99), (10.0, 1.68), (20.0, 1.51 ), (30.0, 1.30), (40.0, 1.16), (50.0, 1.00), (60.0, 0.78), (70.0, 0.56), (80.0, 0.45), (90.0, 0.4), (100, 0.39)
  • DOCUMENT The impact of Customer Relationship on the percentage of New Customers lost in a given time period.
  • impact_of_CR Dn_wom GRAPH(Customer_Relationship) (0.00, 0.00), (10.0, 0.51 ), (20.0, 1.00), (30.0, 1.30), (40.0, 1.52), (50.0, 1.70), (60.0, 1.85), (70.0, 1.93), (80.0, 1.98), (90.0, 1.99), (100, 2.00) DOCUMENT: The impact of Customer Relationship on the word of mouth multipliers for gaining customers.
  • impactjDfjCSTjDn Duild GRAPH(Customer_Support_Technology) (0.00, 0.34), (10.0, 0.42), (20.0, 0.54), (30.0, 0.68), (40.0, 0.83), (50.0, 1.00), (60.0, 1.13), (70.0, 1.25), (80.0, 1.37), (90.0, 1.43), (100, 1.46)
  • DOCUMENT The impact of the Customer Support Technology on Customer Relationship units built. The more technology the firm has, the easier it is to build the relationship.
  • impact Df_CST Dnj oC_building GRAPH(Customer_Support_Technology) (0.00, 0.34), (10.0, 0.42), (20.0, 0.54), (30.0, 0.68), (40.0, 0.83), (50.0, 1.00), (60.0, 1.13), (70.0, 1.25), (80.0, 1.37), (90.0, 1.43), (100, 1.46)
  • DOCUMENT The impact of the Customer Support Technology on Customer Relationship units built. The more technology the firm has,
  • DOCUMENT The impact of Customer Support Technology on the ability to retain Knowledge of Customers. The better the technology, the easier it is to retain.
  • impact Df_custj"elationship GRAPH(Customer_Relationship) (0.00, 0.4), (10.0, 0.625), (20.0, 1.00), (30.0, 1.38), (40.0, 1.73), (50.0, 2.10), (60.0, 2.43), (70.0, 2.68), (80.0, 2.85), (90.0, 3.00), (100, 3.00)
  • DOCUMENT The impact of the strength of customer relationship on the number of units desired per customer.
  • impact_of_ej ' nv GRAPH(investingJn 3mployees)
  • impact_ofjMC DnJimeJo adjust_AAR GRAPH(NetworkjContacts) (0.00, 5.97), (10.0, 5.49), (20.0, 4.98), (30.0, 4.35), (40.0, 3.87), (50.0, 3.45), (60.0, 3.06), (70.0, 2.61 ), (80.0, 2.10), (90.0, 1.71 ), (100, 1.26)
  • impact_of_OKj--nJech GRAPH(Organizational_Knowledge) (0.00, 0.34), (10.0, 0.42), (20.0, 0.54), (30.0, 0.68), (40.0, 0.83), (50.0, 1.00), (60.0, 1.13), (70.0, 1.25), (80.0, 1.37), (90.0, 1.43), (100, 1.46) DOCUMENT: The impact of the organizational knowledge on the ability of the firm to improve technology.
  • Df_Relationshipj uilding_on_Koc GRAPH(Customer_Relationship) (0.00, 0.41), (10.0, 0.45), (20.0, 0.53), (30.0, 0.65), (40.0, 0.82), (50.0, 1.00), (60.0, 1.15), (70.0, 1.28), (80.0, 1.39), (90.0, 1.46), (100, 1.50)
  • DOCUMENT The impact of Customer Relationship on building customer knowledge.
  • impact_of_RI_on attracting GRAPH(Relationship_with_lnvestors) (0.00, 0.37), (10.0, 0.47), (20.0, 0.58), (30.0, 0.67), (40.0, 0.83), (50.0, 1.00), (60.0, 1.20), (70.0, 1.34), (80.0, 1.44), (90.0, 1.53), (100, 1.58) DOCUMENT: The impact of Relationship with Investors on the ability to attract new investors. The greater the relationship, the easier it is to attract new investors.
  • impact_of_RljDn_chgj ' n_ITD GRAPH(Relationship_with_lnvestors) (0.00, 0.33), (10.0, 0.38), (20.0, 0.45), (30.0, 0.58), (40.0, 0.75), (50.0, 1.00), (60.0, 1.23), (70.0, 1.38), (80.0, 1.48), (90.0, 1.56), (100, 1.60) DOCUMENT: The impact of Relationship with Investors on the ability to gather transaction data. The greater the relationship, the easier it is to get data.
  • impactjDf_RI_onJosing GRAPH(Relationship_with_lnvestors)
  • impact_of_SN_on_ch GRAPH(SupplierjNletwork)
  • DOCUMENT The impact of Transaction Data on Customer Relationship units built. The more data the firm has, the easier it is to build the relationship.
  • impact_of_Technology_onjproductivity GRAPH(Technology) (0.00, 0.00), (10.0, 0.00), (20.0, 0.00), (30.0, 0.00), (40.0, 0.00), (50.0, 0.00), (60.0, 0.00), (70.0, 0.00), (80.0, 0.00), (90.0, 0.00), (100, 0.00)
  • DOCUMENT The impact of Technology on internal productivity.
  • impact DfJs GRAPH(techjspending)
  • DOCUMENT The amount the firm's technology is improved in a given time period.
  • interestj-ate basej ' nterest_rate*impact Df_ARCDD
  • Dnj ' ntj-ate DOCUMENT: The interest rate the firm is charged on its debt.
  • i nte rn a I jp rod uctivity basej roductivity * impact Df_PDjDnj3roductivity*impactjDf_TechnologyjDn_ productivity
  • DOCUMENT Actual internal productivity is determined by base productivity and the impacts of Production Data and Technology.
  • ITDjperJrans ⁇ Place right hand side of equation here... ⁇
  • DOCUMENT The amount of transaction data gathered for each transaction.
  • DOCUMENT An amount of Knowledge of Customers will become obsolete each time period.
  • DOCUMENT The number of channels lost in a given time period.
  • DOCUMENT The rate at which the firm loses Fixed Assets, for whatever reason.
  • losingjnvestors lnvestors*baseJoss_frac * impactjDf_Rl DnJosing DOCUMENT: The number of Investors lost over a given time period.
  • losing JTD lnvestment_TransactionjData/4
  • DOCUMENT The natural loss of relationship that occurs from atrophy per time period.
  • losing supplierjnetwork SupplierjNetwork/suppliersj-esidenceJime DOCUMENT: The number of suppliers the firm loses in a given time period.
  • losingj-infilledj-equests Requestsj3acklog/4
  • DOCUMENT The number of orders lost each time period as customers take their requests away for whatever reason.
  • Loyal_wom ⁇ Place right hand side of equation here... ⁇

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  • Tourism & Hospitality (AREA)
  • Management, Administration, Business Operations System, And Electronic Commerce (AREA)
  • Financial Or Insurance-Related Operations Such As Payment And Settlement (AREA)

Abstract

La valeur marchande d'une entreprise dépend de plusieurs facteurs, notamment l'ancienneté et la capacité des ses installations, la popularité de ses marques, l'ingéniosité de son personnel, etc. Ces facteurs matériels et immatériels, ou actifs, sont le reflet des décisions d'une entreprise d'investir ou d'affecter ses ressources de manière spécifique. Par conséquent, toutes les décisions d'exploitation d'une entreprise, comme par exemple l'embauche ou le licenciement de personnel, la vente ou le rachat d'actions, l'achat ou la vente d'installations, ou un plus grand investissement financier en matière de publicité, sont des décisions d'investissement qui affectent la valeur marchande. A partir de ces données, les inventeurs ont créé un système informatique qui modélise les conséquences des décisions commerciales sur la valeur marchande d'une entreprise. Le système classifie les actifs et autres données représentatives des décisions commerciales en catégories d'avoirs matériels et immatériels et modélise la valeur marchande en fonction des actifs de ces différentes catégories. Le système permet également aux entreprises de simuler les conséquences de leurs décisions opérationnelles sur la valeur marchande, et affiche, par l'intermédiaire d'outils graphiques particuliers, la contribution relative des biens associés à cette valeur. Enfin, l'invention propose des conseils orientés sur le marché et visant à faire prendre aux entreprises des décisions de gestion commerciale optimisant leur rendement tout en réduisant les risques.
PCT/US1999/029467 1998-12-11 1999-12-11 Systeme de modelisation, d'evaluation, de gestion et de description des consequences de decisions commerciales sur la valeur marchande WO2000034911A2 (fr)

Priority Applications (1)

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AU21765/00A AU2176500A (en) 1998-12-11 1999-12-11 System for modeling, measuring, managing, and depicting the effects of business decisions on market value

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US11180198P 1998-12-11 1998-12-11
US60/111,801 1998-12-11
US28380199A 1999-04-01 1999-04-01
US09/283,801 1999-04-01

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Cited By (24)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
US7062757B2 (en) 1998-03-05 2006-06-13 American Management Systems, Inc. Decision management system which is cross-function, cross-industry and cross-platform
US6546545B1 (en) 1998-03-05 2003-04-08 American Management Systems, Inc. Versioning in a rules based decision management system
US6601034B1 (en) 1998-03-05 2003-07-29 American Management Systems, Inc. Decision management system which is cross-function, cross-industry and cross-platform
US6609120B1 (en) 1998-03-05 2003-08-19 American Management Systems, Inc. Decision management system which automatically searches for strategy components in a strategy
US8364578B1 (en) 1998-03-05 2013-01-29 Cgi Technologies And Solutions Inc. Simultaneous customer/account strategy execution in a decision management system
US7318224B2 (en) 1998-03-05 2008-01-08 American Management Systems, Inc. Versioning in a rules based decision management system
US6708155B1 (en) 1999-07-07 2004-03-16 American Management Systems, Inc. Decision management system with automated strategy optimization
WO2001025977A1 (fr) * 1999-10-01 2001-04-12 Minerva Holdings Nv Procede et dispositif d'etablissement de prix
US7107229B1 (en) 2000-02-11 2006-09-12 Claremont Investment Partners, Llc Apparatus and method for creating and managing a financial instrument
FR2814564A1 (fr) * 2000-07-20 2002-03-29 Ge Medical Tech Serv Procede et appareil pour la classification d'equipement dans une base de donnees de gestion des biens
GB2370389A (en) * 2000-08-09 2002-06-26 Global Strategy Dynamics Ltd Process for mapping change in a business system
WO2002041201A1 (fr) * 2000-11-17 2002-05-23 Grey-Hen Oy Systeme de gestion et procede associe
US8489491B2 (en) 2001-06-19 2013-07-16 Digitech Information Systems, Inc. Method of managing financial instruments, equipment lease derivatives and other collateral instruments, data architecture, application and process program
US9589475B2 (en) 2001-08-08 2017-03-07 Geoffrey S. Lycas Method and apparatus for personal awareness and growth
US7769626B2 (en) 2003-08-25 2010-08-03 Tom Reynolds Determining strategies for increasing loyalty of a population to an entity
WO2005022420A1 (fr) * 2003-08-29 2005-03-10 Medical Technologies Inc. Procede et systeme pour securiser un actif informationnel et pour gerer les risques
US8666800B2 (en) 2004-03-30 2014-03-04 Thomson Financial Llc Method and system for providing guidance data
WO2008154734A1 (fr) * 2007-06-21 2008-12-24 Copperleaf Technologies Inc. Système et procédé d'analyse et de planification d'investissement
WO2008154733A1 (fr) * 2007-06-21 2008-12-24 Copperleaf Technologies Inc. Système et procédé de modélisation d'une entreprise basée sur des actifs
US20140006088A1 (en) * 2011-12-08 2014-01-02 Copperleaf Technologies Inc. Automated scheduling of non-routine maintenance to systems of capital assets
US9679253B2 (en) 2014-11-06 2017-06-13 Copperleaf Technologies Inc. Methods for maintaining infrastructure equipment and related apparatus
WO2017180671A1 (fr) 2016-04-11 2017-10-19 Openmatters, Inc. Notation de modèle commercial universel, classification et moteur de prise de décision
US10614363B2 (en) 2016-04-11 2020-04-07 Openmatters, Inc. Method and system for composite scoring, classification, and decision making based on machine learning
US11276007B2 (en) 2016-04-11 2022-03-15 Aimatters, Inc. Method and system for composite scoring, classification, and decision making based on machine learning

Also Published As

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