Enhanced business reporting methodology

Abstract

The Enhanced Business Reporting Methodology provides a way to assess the performance of a company. The method includes receiving financial data about the company, calculating a Total Economic Profit (TEP) value based in part on the financial data, the TEP value including a current value component and a future value component, determining a business component of the company that drives the current value component and/or the future value component, and assessing the business component based in part on the TEP value, the current value component, and/or the future value component. A Total Return to Shareholders (TRS) value may be calculated from this data. The TRS may be decomposed into components and mapped onto a computer-generated display. The data may also be incorporated in corporate management systems and investment analysis systems, and used to generate a set of supplemental financial reports.

1 . A computer-implemented method comprising:
 receiving, into a memory coupled to a processor, financial data about a company;   displaying, in a graphical display coupled to the processor, Statements comprising: right, left, top and bottom regions; right, left, top and bottom edges that define the border of the Statements, the Statements comprising:   a Statement of Total Economic Profit (TEP) comprising Earnings before Interest and Taxes (EBIT), Net Operating Profit After Tax (NOPAT), Weighted Average Cost of Capital (WACC), Economic Profit of Current Value (EPCV), Economic Profit of Future Value (EPFV), Total Economic Profit (TEP) at least at a beginning and ending of a reporting period based on the received financial data,   a Statement of Enterprise Value (EV) comprising the EPCV, the WACC, market value of equity, market value of debt, EPCV in perpetuity and enterprise value at least at the beginning and ending of a reporting period based on the received financial data;   a Statement of Total Return to Shareholders (TRS), comprising the EPCV in perpetuity, an unadjusted Total Return to Shareholders (unadjusted TRS), a change in market value of equity, dividends paid in the period based on the received financial data;   an adjusted TRS, an expected TRS value, a predefined industry-based market index from the beginning of the reporting period to the ending of the reporting period based on a beta value for the company; and   wherein the graphical display displays the Statement of Total Economic Profit (TEP), the Statement of Enterprise Value (EV), and the Statement of Total Return to Shareholders (TRS) with Generally Accepted Accounting Principles (GAAP) financial reports to the financial services community, wherein the right region displays values for each of the descriptions displayed in the left region of the Statements, including values for a prior year, a percentage change from a previous year to the prior year, a current year, and a percentage change from the prior year to the current year.   
     
     
         2 . The computer-implemented method of  claim 1 , wherein
 the displayed Statement of total Economic Profit further includes invested capital, capital charge, Return on Invested Capital (ROIC), and the spread between ROIC and WACC.   
     
     
         3 . The computer-implemented method of  claim 1 , wherein the displayed Statement of Enterprise Value (EV) includes the EPCV, the WACC, the EPCV in perpetuity, current value, future value and debt to equity ratio. 
     
     
         4 . The computer-implemented method of  claim 1 , wherein the displayed Statement of total Return to Shareholders (TRS) further includes EPCV in perpetuity, Capital available to Equity Holders, Current Value in the Market Value of Equity, Future Value in the Market Value in Equity, Number of Outstanding Equity Shares and the Closing Share Price of the Equity in the reporting period. 
     
     
         5 . The computer-implemented method of  claim 1 , further comprising displaying with the adjusted TRS the value for beta, the predefined industry-based market index indicative of a market value relevant to the predefined industry at the beginning and ending of the reporting period, a predicted return based on the market values, and a TRS performance score relative to the market index. 
     
     
         6 . The computer-implemented method of  claim 1  further comprising incorporating supporting disclosure in the Statements, the supporting disclosure explaining the methodologies and financial data used to calculate certain of the financial metrics included in the statements. 
     
     
         7 . A computer program product comprising:
 a recording medium readable by a computer; and   computer instructions stored on said recording medium, the computer instructions when executed by the computer cause the computer to:   calculate supplemental financial metrics Net Operating Profit After Tax (NOPAT), Weighted Average Cost of Capital (WACC), a Return on Invested Capital (ROIC), a value of Invested Capital of the company with optional adjustments for operating leases, goodwill and stock options, and a Market Value of Debt with adjustments for off balance sheet financing;   retrieve financial metrics from the balance sheets and income statements;   receive financial data;   calculate, by applying the supplemental financial metrics and the retrieved financial metrics, a set of enhanced business reporting metrics including a total return to shareholder (unadjusted TRS) value adjusted for market fluctuation, an Economic Profit of Current Value (EPCV), Economic Profit of Future Value (EPFV), Total Economic Profit (TEP), market value of equity, market value of debt, enterprise value, and a value of EPCV in Perpetuity determined by capitalizing the EPCV over the WACC by dividing the EPFV by the WACC, a change in the market value of equity plus dividends paid based on the received financial data, value of beta, a predicted movement of company share price due to changes in a predefined industry-based market index from the beginning of a reporting period to the ending of the reporting period based on the beta value;   generate supplemental financial reports using the enhanced business reporting metrics; and   display, in a graphical display in communication with the computer, supplemental financial reports, wherein the supplemental financial reports comprise: right, left, top and bottom regions; right, left, top and bottom edges that define the border of the supplemental financial reports, wherein the left region displays a description of each value displayed in the supplemental financial reports, wherein the right region displays values for each of the descriptions displayed in the left region of the supplemental financial reports, including values for a prior year, a percentage change from a previous year to the prior year, a current year, and the percentage change from the prior year to the current year.   
     
     
         8 . The computer program product of  claim 7 ,
 where generating supplemental financial reports includes generating a Total Economic Profit report containing a current period and a prior period value for NOPAT, WACC, Invested Capital, EPCV, EPFV and TEP.   
     
     
         9 . The computer program product of  claim 7 ,
 where generating supplemental financial reports includes generating an Enterprise Value report containing market value of equity, market value of debt, and enterprise value.   
     
     
         10 . The computer program product of  claim 9 , where generating supplemental financial reports includes generating the Enterprise Value report containing the EPCV, the WACC and the value of EPCV in Perpetuity. 
     
     
         11 . The computer program product of  claim 10 , further comprising calculating the TRS value based on the change in equity prices and dividends received, and wherein generating supplemental financial reports includes generating a TRS report containing the change in market value of equity, closing share prices for the beginning and ending of the reporting period and the unadjusted TRS value. 
     
     
         12 . The computer program product of  claim 11 , wherein generating supplemental financial reports includes generating a TRS adjusted report containing the predefined industry-based market index, beta predict company return due to market movement and an adjusted TRS indicative of the shareholder return above or below the expected return due to market movement. 
     
     
         13 . A computer system comprising:
 a database comprising financial data;   a data processor in communication with the database;   a recording medium storing executable instructions readable by the data processor, the instructions being stored on said recording medium, the instructions when executed by the data processor cause the data processor to:   calculate with the data processor supplemental financial metrics Net Operating Profit After Tax (NOPLAT), Weighted Average Cost of Capital (WACC), a Return on Invested Capital (ROIC), a value of Invested Capital of the company with optional adjustments for operating leases, goodwill and stock options, and a Market Value of Debt with adjustments for off balance sheet financing;   retrieve financial metrics from balance sheets and income statements stored in the database;   calculate a set of enhanced business reporting metrics including a total return to shareholder (TRS) value adjusted for market fluctuation by applying the supplemental financial metrics and the retrieved financial metrics;   generate supplemental financial reports using the enhanced business metrics; and   display, in a graphical display in communication with the data processor, the supplemental financial reports, wherein the graphical display displays the supplemental financial reports comprising: right, left, top and bottom regions; right, left, top and bottom edges that define the border of the supplemental financial reports,   wherein said supplemental financial reports comprise:
 a Statement of Enterprise Value (EV), wherein the left region displays a description of each value displayed in the Statement of EV, including market value of equity, market value of debt, Economic Profit of Current Value (EPCV) in perpetuity, enterprise value, current value (CV) and future value (FV), wherein the right region displays values for each of the descriptions displayed in the left region of the Statement of EV, including values for a prior year, change from a previous year to the prior year, percentage change from the previous year to the prior year, a current year, change from the prior year to the current year, and percentage change from the prior year to the current year; 
 a Statement of Total Return to Shareholders (TRS) unadjusted, wherein the left region displays the description of each value displayed in the Statement of TRS, including the EPCV in perpetuity, a change in market value of equity, dividends paid in the period, Invested Capital, Capital subordinate to Debt, Future Value in Market Value of Equity, The Number of Shares Outstanding, Dividends per share, wherein the right region displays values for each of the descriptions displayed in the left region of the Statement of TRS, including values for the prior year, the change from the previous year to the prior year, the percentage change from the previous year to the prior year, the current year, the change from the prior year to the current year, and the percentage change from the prior year to the current year; 
 a Statement of TRS adjusted, wherein the left region displays the description of each value displayed in the Statement of TRS adjusted, including an expected TRS value, a predefined industry-based market index, a beta value for the company, the unadjusted TRS, wherein the right region displays values for each of the descriptions displayed in the left region of the Statement of TRS adjusted, including values for the prior year, the percentage change from the previous year to the prior year, the current year, and the percentage change from the prior year to the current year. 
   
     
     
         14 . The computer system of  claim 13 , wherein the instructions stored on said recording medium when executed by the data processor cause the data processor to calculate future value with the data processor, said future value being calculated as the difference between enterprise value and current value, said current value being calculated as NOPLAT divided by WACC minus excess cash.