The ValueReporting Revolution: Moving Beyond the Earnings Game
Even with the recent drop-off in stock prices, there's still great variation in how financial markets are valuing companies. To add more predictability to valuations, says this team of authors from PricewaterhouseCoopers, companies should take the initiative and publicize the nonfinancial measures that can drive future success. Otherwise, they say, analysts and individual investors will rely on their own estimates, which inevitably either undervalue a company or set it up for a fall. The main trouble, they find, lies not in disagreements over the key drivers but in executives' age-old reluctance to divulge information. The book covers these important debates, as well as the shifting world of accounting principles and oversight, in a comprehensive fashion and with clear prose. Yet while parts of this lengthy, lopsided book are full of detail, the case studies of companies actually experimenting with new metrics are surprisingly thin.--The Harvard Business Review