Turning Vision into Value

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This book explains financial and accounting information to managers without prior knowledge of the subject, focusing on measuring and creating economic value in organizations. It begins with core accounting principles and examines economic value measures, particularly Return on Net Assets (RONA) and Return on Equity (ROE), emphasizing their importance and the factors that influence them within the DuPont model framework. The discussion extends to sustainable growth, highlighting the implications of excessive or insufficient growth on value creation. The final section integrates previous concepts into corporate valuation, discussing the time value of money, discounting, and cost of capital to enhance understanding of valuation and the value creation process. Two valuation approaches are presented: the traditional discounted cash flow method and the economic value added (EVA®) approach. The book includes examples, problems, and case studies, along with a customizable Excel® spreadsheet on CD-Rom for business analysis and valuation. Prof. Colin Firer praises the volume for demystifying finance, making it essential for finance professionals and non-financial managers alike. Mike Ward, a finance professor and director at the University of Pretoria, and Allan Price, a corporate finance consultant and former architect, contribute their expertise to make finance accessible and practical.