Chief Executive

NOVEMBER 15, 2022

Since shareholder value is driven by investor expectations of future cash flow and EP growth (See S&P 500 Warranted Value of Discounted Economic Profits vs. Actual Traded Value chart, below), EP has been used as the profitability metric for AlixPartners’ Automotive Value Creation study.

Cash Flow 52

Cash Flow Manager Fixed Costs Metrics 52

Harvard Business Review

APRIL 5, 2017

Similarly, considering greater accruals (which represent the difference between reported income and operating cash flows) to measure short-term orientation has its difficulties. It assumes that a smaller proportion of cash flows in earnings indicates a myopic firm.

Metrics 11

Metrics Cash Flow Revenue Compensation 11

Harvard Business Review

MAY 19, 2015

That gave it a steadier cash flow to cover the costs of its large fixed cost investments, but did not eliminate the unused capacity of plants dedicated to one kind of product. Headquarters provides accountability and perhaps better metrics than the divisional managers might otherwise have.

Cash Flow 15

Cash Flow Engineering Fixed Costs Sales 15

Harvard Business Review

OCTOBER 7, 2015

Despite metrics showing impressive overall company performance, the company’s capital deployment strategy was not maximizing shareholder dividends and/or buybacks. However, free cash flow per share remained impressive at both companies, and fixed cost ratios remained somewhat intact. Example: Jolly Inc.

Balance Sheet 12

Balance Sheet Cash Flow Revenue Reorganization 12