9781118173046

The Essential CFO A Corporate Finance Playbook

by
  • ISBN13:

    9781118173046

  • ISBN10:

    111817304X

  • Format: Paperback
  • Copyright: 5/1/2012
  • Publisher: Wiley
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Summary

During the past decade, the CFO role has expanded dramatically in its breadth, complexity, and criticality. Filled with proven strategies, practical suggestions, and keen insights, this book describes how today's CFOs are responding to their expanded roles within both public and private companies. It shows how CFOs are partnering with CEOs to deliver shareholder value by articulating a strategic plan, managing the capital structure, determining capital allocations, driving financial performance, and implementing strategic transactions; How CFOs are establishing robust accounting and risk management processes and effectively communicating with both external and internal constituencies; and how CFOs are leading financial organizations to drive effectiveness and efficiencies and to develop talent with the experience, expertise, and leadership skills to meet the challenges of the future.

Author Biography

Bruce Nolop retired in 2011 after a 35-year career as an investment banker and corporate executive, including more than a decade as chief financial officer of Pitney Bowes and E Trade Financial. He has been a board member of Marsh McLennan since January 2008 and currently serves on the audit, compliance and risk, finance, and corporate responsibility committees.

Table of Contents

Introductionp. xv
Strategy
Articulating a Strategic Planp. 3
Business Objectivesp. 4
Strategic Themesp. 5
Long-Term Financial Modelp. 7
Total Shareholder Returnp. 10
Capital Allocation Strategiesp. 14
Acquisition Strategiesp. 15
Target Shareholdersp. 17
Elevator Pitchp. 20
Plan Revisionsp. 21
Communicating and Achieving Alignmentp. 23
Consistency and Transparencyp. 24
Incentive Compensation Programsp. 25
Investor Alignmentp. 28
Analyst Relationsp. 29
Investor Presentationsp. 31
Company Websitep. 35
Social Mediap. 36
Media Relationsp. 37
Potential Media Pitfallsp. 38
Coordinating Communicationsp. 39
Interview Formatsp. 39
Media Trainingp. 40
Notep. 42
Assessing Enterprise Risksp. 43
Enterprise Risk Managementp. 43
Implementation of ERMp. 44
Risk Identificationp. 45
Risk Quantificationp. 46
Major Exposuresp. 47
Mitigation Strategiesp. 50
Rewarded versus Unrewarded Risksp. 51
Governance of ERMp. 52
CFO's Role in ERMp. 54
Capital Allocations
Estimating the Cost of Capitalp. 59
WACC Formulap. 59
Hurdle Ratesp. 63
Risk Premiumsp. 63
Acquisition Cost of Capitalp. 65
Prioritizing Capital Investmentsp. 67
Cash Flow Projectionsp. 67
Investment Budgetp. 68
Evaluating Projectsp. 71
Categorizing Projectsp. 74
Monitoring Projectsp. 75
Pension Fund Contributionsp. 77
Considering Dividends and Repurchasesp. 79
Dividend Policy Alternativesp. 80
Dividend Policy Considerationsp. 82
Special Dividendsp. 85
Dividend Declarationsp. 85
Repurchase Considerationsp. 86
Open Market Programsp. 90
Tender Offersp. 92
Retaining Strategic Cashp. 92
Cash Investment Policiesp. 95
Mergers and Acquisition
Identifying Acquisition Candidatesp. 99
Rationale for Acquisitionsp. 99
Adjacent Spacesp. 100
Portfolio Approachp. 101
Business Sponsorp. 101
Patience and Flexibilityp. 102
Strategic Purposep. 102
Types of Acquisitionsp. 103
Notep. 107
Evaluating Acquisition Candidatesp. 109
Valuation Methodologiesp. 109
Standalone and Synergy Valuesp. 112
Pro Forma Analysesp. 113
Acquirer's Stock Valuationp. 116
Risk Considerationsp. 116
Executing a Merger or Acquisitionp. 119
Due Diligencep. 119
Business Planp. 123
Financial Projectionsp. 124
Financing Planp. 126
Price Negotiationsp. 128
Contract Termsp. 129
Acquisition Integrationp. 132
Notep. 134
Executing Divestitures and Spinoffsp. 135
Divestiture Evaluationsp. 135
Hiring Investment Bankersp. 136
Auction or Negotiatedp. 137
Stock or Assetsp. 139
Financing Conditionsp. 139
Management Participationp. 140
Tax-Free Spinoffsp. 141
Split-Upsp. 142
Equity Carve-Outsp. 143
Responding to Takeover Offersp. 145
Governance Policiesp. 145
Reviewing an Offerp. 146
Conducting a Sale Processp. 148
Activist Shareholdersp. 149
Going Private Transactionsp. 149
Funding
Establishing Capital Structure Objectivesp. 153
Leverage Targetsp. 153
Leverage Criteriap. 155
Rating Agenciesp. 157
Ratings Categoriesp. 158
Rating Agency Dialoguesp. 160
Ratings Criteriap. 161
Informing Investorsp. 162
Notep. 163
Developing Financing Strategiesp. 165
Financing Principlesp. 165
Debt Financingp. 167
Equity Financingp. 171
Off Balance Sheet Financinqp. 174
Debt Covenantsp. 177
Debt Refinancingsp. 179
Debt for Equity Swapsp. 180
Bankruptcyp. 182
Ensuring Short-Term Liquidityp. 185
Bank Linesp. 185
Cash Planningp. 187
Contingency Planningp. 187
Liquidity Ratiosp. 189
Working Capital Strategiesp. 189
Trapped Cashp. 191
Obtaining Long-Term Financingp. 193
Venture Capitalp. 193
Private Equityp. 194
Initial Public Offeringp. 195
Subsequent Equity Offeringsp. 198
Term Loansp. 200
Syndicated Bank Loansp. 200
Investment Grade Securitiesp. 200
High Yield Securitiesp. 201
Strategic Alliancesp. 202
Notep. 203
Performance
Driving Business Performancep. 207
Organic Revenue Growthp. 207
Cost Reduction Strategiesp. 211
Fixed versus Variable Costsp. 219
Notep. 219
Providing Planning and Analysisp. 221
Budgetsp. 221
Forecastsp. 225
Cash Flowsp. 226
Performance Metricsp. 228
Business Unit Metricsp. 231
Performance Reportsp. 232
Business Analysisp. 233
Managing Financial Risks and Taxesp. 235
Insurancep. 235
Interest Ratesp. 238
Currenciesp. 239
Commoditiesp. 241
Inflationp. 242
Pension Fundp. 243
Tax Planningp. 244
Accounting and Controls
Establishing Accounting Processesp. 251
Financial Reportingp. 251
SEC Filingsp. 255
External Auditorsp. 259
Audit Committeep. 259
Notep. 260
Communicating Financial Resultsp. 261
Earnings Callp. 261
Non-GAAP Measuresp. 266
Earnings Guidancep. 267
Notep. 271
Implementing Sarbanes-Oxleyp. 273
Overview of Provisionsp. 273
Auditor Independencep. 274
Certification of Financialsp. 275
Assessment of Internal Controlsp. 276
Reinforcing Compliance and Controlsp. 281
Control Environmentp. 282
Auditor and Board Supportp. 283
Foreign Corrupt Practices Actp. 285
Fraud Preventionp. 287
Whistleblowersp. 287
Cost of Compliancep. 288
Notep. 289
Leadership
Achieving Finance Transformationp. 293
Organizational Structurep. 293
Technology Systemsp. 298
Process Reengineeringp. 301
Outsourcing Advantagesp. 303
Outsourcing Implementationp. 305
Analysis versus Datap. 308
Developing Financial Talentp. 311
Recruitment Strategiesp. 312
Development Objectivesp. 316
Development Toolsp. 320
Diversityp. 325
Future Requirementsp. 325
Notep. 326
About the Authorp. 327
Acknowledgmentsp. 329
Indexp. 331
Table of Contents provided by Ingram. All Rights Reserved.

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