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Decision Equity by Piyush Kumar

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The True Residence of Equity

One of the important management trends of the last decade is the increased emphasis on connecting nonfinancial decisions to their financial consequences. While several financial metrics can be linked to managerial actions, one that has recently gained popularity is equity. The notion of equity is borrowed from the financial principles of capitalizing future cash flows into their present value using an appropriate discounting mechanism. For example, many firms try to estimate the relationship between their investments in customer satisfaction management programs or in product development programs and their respective financial consequences. One of the metrics of interest when following these approaches is the lifetime ...

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