Through a rigorous review of formal management processes and analytical decision models coupled with a series of interviews, we evaluate a company’s existing formal and informal business management practices for:

• Setting financial goals
• Developing and evaluating strategic plans
• The annual budgeting process and rolling forecasts
• Benchmarking and linkage to performance improvement targeting
• Capital investment analysis, approval and allocation
• Portfolio evaluation and the valuation of acquisitions and divestitures
• Monitoring and appraising on-going operating performance
• Incentive compensation and other reward programs

During this Internal Capitalism Audit, we look for:

• Where decisions are suboptimal due to inadequate or incomplete analysis (for example, the way ROIC favors older assets)

• If decision criteria and subsequent Performance Measures differ and accountability breaks down (many companies use DCF to make investment decisions and then measure operating profit after the fact)

• Whether the variety and quantity of tools and measurement criteria presents a confusing picture, particularly to non-financial people. 

We identify process strengths that should be preserved and weaknesses that should be eliminated to help a company better focus management on creating shareholder value.

To read more about internal capitalism audit click here