FinanceFramework / modelValuing the firmWhen and how should valuing the firm be applied?Estimate a defensible price for an acquisition or disposal.
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FinanceFramework / modelValuing the firmWhen and how should valuing the firm be applied?Estimate a defensible price for an acquisition or disposal.
FinanceKPI / metricPrice quality strategyHow should price quality strategy be measured and interpreted?Guide positioning and pricing for a product or service.
FinanceTemplate / formPricing readiness checklistHave product, finance, legal, operations, billing, sales, and customer implications of a price been addressed?
FinanceTemplate / formPricing decision briefWhat customer value, alternatives, economics, packaging, risks, and evidence support a price decision?
FinanceFramework / modelPrice elasticityHow can price elasticity support strategic choice or positioning?Estimate how price changes may affect volume and revenue.
FinanceFramework / modelConjoint analysisHow can conjoint analysis support strategic choice or positioning?Use it to estimate the relative value of product components and identify attractive price–feature combinations.
FinanceTheory / principleReal options theoryWhen and how should real options theory be applied?Use real options reasoning when outcomes are uncertain, management can respond to future information, the response has material economic value and the initial decision affects whether that flexibility remains available. It is especially useful when a conventional discounted cash flow or net present value calculation treats management as passive and therefore misses the value of staged commitment.
FinanceFramework / modelCapital budgetingWhen and how should capital budgeting be applied?To decide whether a proposed long term investment is expected to create value.
FinanceKPI / metricOperating profit marginHow should operating profit margin be measured and interpreted?Use operating profit margin to track whether revenue is converting into operating profit, to compare business units or periods using the same accounting definition, and to investigate the effect of pricing, volume, mix and operating costs. It is especially useful alongside revenue growth: growth that requires operating costs to rise faster than revenue will reduce the margin.
FinanceFramework / modelBond valuationWhen and how should bond valuation be applied?To estimate a bond’s value when considering a purchase or sale.
FinanceFramework / modelValue equivalence lineHow can value equivalence line support strategic choice or positioning?Diagnose whether a brand’s price and perceived benefits support its market position.
FinanceKPI / metricReturn on investment (ROI)How should return on investment (roi) be measured and interpreted?Answer the key performance question: “How well are we generating sustainable profits?”
FinanceFramework / modelEconomic value added (EVA)When and how should economic value added (eva) be applied?Answer the key performance question: “How well are we delivering value to our shareholders?”
FinanceFramework / modelNew product pricing (Gabor–Granger and van Westendorp)When and how should new product pricing (gabor–granger and van westendorp) be applied?To research price perceptions and purchase intent for a new or existing offer.
FinanceFramework / modelCustomer lifetime valueWhen and how should customer lifetime value be applied?Use it to estimate the economic contribution of a customer over the relationship.
FinanceFramework / modelCapital asset pricing model (CAPM)How can capital asset pricing model (capm) support strategic choice or positioning?Use CAPM when a decision requires a transparent estimate of the return appropriate to market risk. Owners and external investors can use it to assess whether a prospective equity return compensates for that risk. Corporate finance teams use it to estimate the cost of equity, while banks, pension funds and other institutional investors use its logic in portfolio and valuation work.
FinanceKPI / metricGross profit marginHow should gross profit margin be measured and interpreted?Determine how much gross profit the organisation retains from each dollar of sales.
FinanceFramework / modelValue-based managementHow can value-based management support strategic choice or positioning?Use VBM to set goals, evaluate strategy and performance, allocate capital, design incentives, communicate with investors and value businesses or projects. Traditional accounting measures such as earnings per share or return on equity can report profit without charging fully for the opportunity cost of invested capital. VBM makes that charge explicit.
FinanceKPI / metricWorking capital ratioHow should working capital ratio be measured and interpreted?Answer the performance question: “How well are we managing our cash flow?”
FinanceKPI / metricPrice/earnings ratio (P/E ratio)How should price/earnings ratio (p/e ratio) be measured and interpreted?Answer the performance question: “How does the market value this company relative to its earnings?”
FinanceFramework / modelBlack-Scholes options pricing modelHow can black-scholes options pricing model support strategic choice or positioning?To estimate a theoretical value for European options traded in financial markets.
FinanceKPI / metricDebt-to-equity (D/E) ratioHow should debt-to-equity (d/e) ratio be measured and interpreted?Answer the key performance question: “To what extent are we financing our business through debts versus equity?”
FinanceFramework / modelTime value of moneyWhen and how should time value of money be applied?Compare personal investments or financing choices.
FinanceKPI / metricReturn on assets (ROA)How should return on assets (roa) be measured and interpreted?Answer the key performance question: “To what extent are we able to generate profits from the assets we control?”
FinanceFramework / modelActivity-based costingWhen and how should activity-based costing be applied?ABC is particularly useful when overhead is substantial and products or customers vary widely in complexity and handling requirements. By tracing indirect expenditure to the activities that generate it, the method makes those costs more directly attributable. This greater precision can expose opportunities to improve process effectiveness and efficiency while clarifying the true cost of an offer.
FinanceFramework / modelWeighted average cost of capitalWhen and how should weighted average cost of capital be applied?Select a discount rate for valuing a business or a project with risk comparable to the company’s existing operations.
FinanceKPI / metricNet profitHow should net profit be measured and interpreted?Answer: “To what extent are we generating bottom line results?”FinanceFramework / modelCapital asset pricing modelHow can capital asset pricing model support strategic choice or positioning?To estimate the required return or discount rate for a security, such as a company’s shares.
FinanceKPI / metricCAPEX to sales ratioHow should capex to sales ratio be measured and interpreted?Use the ratio to ask: “How much are we investing in future capacity relative to our sales and competitors?”
FinanceKPI / metricRevenue growth rateHow should revenue growth rate be measured and interpreted?Answer the key performance question: “How well are we growing the business?”
FinanceKPI / metricReturn on equity (ROE)How should return on equity (roe) be measured and interpreted?Answer the key performance question: “How efficiently are we using the investments that shareholders have made to generate profits?”
FinanceKPI / metricReturn on capital employed (ROCE)How should return on capital employed (roce) be measured and interpreted?Answer the key performance question: “How well are we generating earnings from our capital investments?”
FinanceFramework / modelRisk–reward analysisHow can risk–reward analysis support strategic choice or positioning?Use the analysis when several materially different initiatives compete for capital, capacity or management attention. It can support a rapid executive discussion or a detailed process involving market research, return on investment estimates, scenarios and sensitivity analysis.
FinanceFramework / modelDiscounted cash flow (DCF) and net present value (NPV)How can discounted cash flow (dcf) and net present value (npv) support strategic choice or positioning?Use DCF and NPV in capital budgeting and investment appraisal to decide:
FinanceKPI / metricFinancial ratio analysis: liquidity, solvency and profitability ratiosHow should financial ratio analysis: liquidity, solvency and profitability ratios be measured and interpreted?Review ratios as part of regular management reporting and whenever an investment, financing decision or strategic initiative could materially change the financial position.
FinanceFramework / modelDuPont schemeHow can dupont scheme support strategic choice or positioning?Use the scheme to benchmark comparable companies and explain why one earns a different return. It also supports scenario analysis by showing how a proposed change in price, cost, working capital, fixed assets or financing would flow through to the final ratio.
FinanceFramework / modelEconomic value added (EVA) and weighted average cost of capital (WACC)How can economic value added (eva) and weighted average cost of capital (wacc) improve people, teams, or organisational effectiveness?EVA brings two principles into investment and operating decisions:
FinanceFramework / modelModigliani-Miller theoremHow can modigliani-miller theorem support strategic choice or positioning?To introduce capital structure reasoning and expose its assumptions.
FinanceFramework / modelInvestment stagesHow can investment stages improve people, teams, or organisational effectiveness?Use the model when financing a new venture, scaling an established business or screening an investment opportunity. Early ventures often lack collateral, predictable cash flow and operating evidence, while later stages may qualify for a broader mix of equity, debt and strategic funding.
FinanceMatrix / portfolioModern portfolio theoryHow can modern portfolio theory support strategic choice or positioning?To structure discussion of asset allocation and diversification.
FinanceKPI / metricNet profit marginHow should net profit margin be measured and interpreted?Answer: “How much profit are we generating for each dollar in sales?”
FinanceKPI / metricOperating expense ratio (OER)How should operating expense ratio (oer) be measured and interpreted?Answer: “How well are we managing operating expenses relative to revenue?”
FinanceProcess / methodCash conversion cycle (CCC)How can cash conversion cycle (ccc) support strategic choice or positioning?Use CCC to ask: “How effectively does the operating cycle protect our cash position?”
FinanceFramework / modelPredictive sales analyticsHow can predictive sales analytics improve people, teams, or organisational effectiveness?Use predictive sales analytics continuously where forecasts influence inventory, staffing, cash, capacity, targets or financing. It is particularly useful for:
FinanceKPI / metricCustomer profitability analyticsHow should customer profitability analytics be measured and interpreted?Use this analysis continuously to understand where customer value is being created, and give it particular attention when revenue is falling, costs are rising or margins are under pressure. It can reveal whether the problem comes from customer mix, acquisition channels, service demands, pricing or operational cost.
FinanceFramework / modelShareholder value analyticsHow can shareholder value analytics support strategic choice or positioning?Use SVA for strategy, valuation, capital allocation and performance review when long term cash consequences matter. Apply it periodically and at material decision points rather than managing the business to daily share price movement.
FinanceFramework / modelTotal shareholder return (TSR)How can total shareholder return (tsr) support strategic choice or positioning?Answer the performance question: “To what extent are we delivering value to shareholders?”
FinanceKPI / metricProduct profitability analyticsHow should product profitability analytics be measured and interpreted?Use the analysis when launching, changing, repricing or retiring offers and review it at least annually where the portfolio is stable. It can answer: