Chapter 2

Value-Based Management Indicators

Value-based indicators aim to control enterprises (or their organizational units), measuring the creation of value and its risks in a more or less direct way. This chapter specifically illustrates four types of measures.

Keywords

cost of capital; terminal value; relative valuation; risk value indicator

2.1 Value-Based Indicators

Value-based (VB) indicators aim to control enterprises (or their organizational units), measuring the creation of value and its risks in a more or less direct way. This chapter specifically illustrates four types of measures:

• Direct measurement of present value, which is based on the estimation of cash flows exchanged between companies and shareholders or between companies and ...

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