Introduction
Within my firm, shareholder value is recognized as the benefit that is delivered to the owners of equity within a corporation through the increase of sales, earnings, and free cash flow. This indicator directly contributes to the increasing dividends and capital awards of shareholders. As such, my firm observes assets, production, and profits as the major factors that inform shareholder value. Components such as sales, daily operations, and liabilities are especially important in determining the potential status or changes to the shareholder value at the firm.
Main Body
The four financial drivers, which include asset efficiency, profitability, cash flow, and growth, are accounted for at my firm. Drive profitability is seen through the long-term and is able to directly contribute to a strong generation of cash flow. Asset efficiency occurs when the assets at the firm, such as accounts receivable and inventory, are turned into cash (Bikas & Glinskyte, 2021). This includes the assessment of both the day’s sales outstanding and the day’s inventory outstanding measurements that allow for insight into asset changes. As the company grows and develops, the exchange between assets and cash becomes essential. Cash flow is fundamental to the operations of the firm as it provides profitability and the working capital that allows the firm to continue operations. Increased cash flow also suggests that the growth of the firm is proceeding positively. Growth is analyzed through factors such as sales, debt, liabilities, expansion, and shareholder features.
Conclusion
Although all factors are vital to the stability of the firm, the growth element is specifically significant to the mission of the company. Since rapid growth is expected, it is vital that the firm observes that all expansion is manageable and beneficial to the company. Due to this, growth is likely the financial factor that is more valued at the firm.
Reference
Bikas, E., & Glinskyte, E. (2021). Financial factors determining the investment behavior of Lithuanian business companies. Economies, 9(2), 45. Web.