 Well, hello everyone and welcome back to Sailor Academy's MBA 601 financial management This will be the review of unit six if you have any questions as we go along feel free to leave them in the chat Or if you're watching later leave them in the comments below as always this is an overview of Sailor Academy's course It's not the course as a whole so make sure you are looking at the course resources and also checking out the previous videos Because this is the follow-up to unit six so we've actually done six before this because yeah six before this because unit one's two videos But that's enough for everyone. I'm just gonna hand it over here, and I'll get out of the way Hand it over to dr. Pierce. Oh Thanks Michael and welcome back everybody As Michael said, this is unit six of Of our program and if you recall there were seven units in our course on financial management and today we're going to focus a bit on valuation and The implications for valuation of a firm now as I have done in the past Let me first just touch base on our course objectives and in particular for unit six It'll be highlighting the area of evaluation Where we've talked a goodly amount about evaluating a firm's performance By taking a look and digging into the firm's financial statements And also to recognize the importance of free cash flow now remember we talked about free cash flow in a couple of our previous presentations And the impact to the firm well now we're gonna take it one step further I want to make the point and help you understand that Free cash flow is also a very good measure of how well the firm is performing Now in addition to the unit objectives, we do have some unit objectives And we're going to be looking at recognizing the importance of increasing firm value now You've you've heard me talk about this I think in just about every presentation so far and as a former CEO of a of a firm I assure you that it is extremely important to Focus on making decisions that help increase the value of that firm So having said that and we say okay, so yes, that's part of your responsibility Let's talk today a little bit about ways that we can actually go about Measuring corporate value So I'm going to show you how we can do a report card on the decisions that I've been making as I've been trying to Lead this business and we'll talk about some creation Methodologies that we can apply to help us make better business decisions Now generally and overview the topics that we'll talk about today Corporate valuation and again the idea of there are ways There are models that we can use to help us actually assign a value to where the corporation is today Now that's important both internally and externally Obviously internally it helps us review the decisions we're making by focusing on valuation we can improve our decision-making process and Obviously, it has a great deal of interest to External users of our data typically shareholders investors owners of the business We're going to look at some of the methodologies we can use and Determining the value of our companies And then we'll lead us into a brief discussion on the concept of value-based management And all that really means is that if we can find ways to measure what we're doing if we can Look at the performance that's coming from our decisions then we ought to be able to take that information and Help improve the decision-making progress, so we're going to talk about management That is actually making decisions based on value creation and a couple of I think key Value measurements which are the economic value added in the market value added of firms so a number of things to consider today and As always before I go too far into this Let me just stop here and see if in fact there might be any immediate questions before we get started I'm not seeing it. Oops. I'm not seeing any immediate questions in the chat But I do you know just a reminder you can leave them any time in the chat And of course if you're watching this later feel free to leave a comment below and we'll get to it Great, so let's get started and the concept of valuation is is really it's a it's a big broad base discussion we can have We're not going to make it that broad today And I will assure you that there has been just tons and tons of papers written on the idea of Valuation valuing waiting businesses value creation value-based management Should be no surprise that it's a topic of some interest in the world of business today And it doesn't matter whether the business we're talking about is privately held Maybe it's a sole proprietor somebody who's actually invested and launched a business or it's a larger firm It's publicly traded and it has shareholders and investors It's important to know what the value of the firm is at any point in time It's important to know where we were and where we are now So we want to be able to do that comparison of are we making progress? Are we going in the right direction? And as you now know After having gone through a number of of these presentations We're also going to spend a considerable amount of time looking forward and Forecast and trying to determine where we will be or what we want to be But we know that one of the primary goals of management is to create value Rate value for shareholders create value for the firm Now what is the value well When we talk about the value of a firm it represents a number of things It's a it's a report card and the decisions that management is made If management is making the right decisions If the firm is going in the right direction Then you would expect to see that there's an increase in value And so it kind of reflects on the decision-making and it is in fact a report card It's a basis for determining the cost of a share of stock if your stock is you have stock and it's trading on a market What's it worth? well a great deal of Evaluating a stock price is what's the company worth that the stock is a part of It's a way to attract Additional investment if the firm is doing well if the firm is creating value Typically might be the firm that people are looking to invest their money in and if there is any Indication that part of the strategic plan for the business is that you might be quit considering either growing through acquisitions of other businesses or even of being acquired yourself Then a starting point is to know what your business is worth today. All right, so there's a number of reasons why we consider Valuation so let's start now with I'm going to go back to what I think we talked about in unit one and two And we'll do some basic evaluation and the most basic one is the firm's balance sheet So if you recall The balance sheet is a listing of everything that the firm owns and everything that the firm owes All right, so the assets Reflect all the things that we own Liabilities are what we owe and the classic accounting equation is assets minus liabilities is equal to shareholders equity Now what does that actually mean? It's simple if the business were to close today. I Would liquidate all my assets meaning I would take all the things that I own and I would turn them into cash Sell the building sell the inventory sell the equipment and you're sitting there with a pile of cash And the first thing I have to do is pay off all the debts that we have So I'll take care of closing out all the liabilities all the loans and the debts If there is money left and we hope there is it belongs to the owners That shareholders equity that's what they own And so in its simplest form the value of a business is in fact the book value and Owners equity shareholders equity is the book value of the firm All right, so I'm going to take it back to unit one Well, we went into more detail of analyzing a balance sheet, but this is the basic balance sheet and Remember that our assets are divided into those that are current assets Meaning we can those represent the ability to be turned into cash within one year or less You have some longer term assets Typically property plant and equipment So if you've got a big building if you got a manufacturing plant, yes, it's an asset But you may or may not be able to liquidate that building in within a year We then looked at liabilities all the things that we owe and again we have current liabilities those liabilities that you anticipate being paid in the next 12 months and Noncurrent liabilities typically the long-term debt, but I think I used the example earlier on that think of a mortgage You have a 20-year mortgage on a home This year's mortgage payments are current liabilities. Why could you be paying them this year? But the balance of that mortgage is a noncurrent because that's going to go out for the next 19 years All right, so we had the balance sheet assets and liabilities and what was left owner's equity and so again basic accounting equation assets minus liabilities equal shareholders equity and we can see for example based on the numbers we had that for 2019 the shareholders equity was $557,000 So after assets were liquidated that's were paid off. There was $550,000 that belong to shareholders. That's the book value of the firm. That's what it's worth. Let's assume you're a sole owner so that $557,000 is yours and That is the value of the firm All right, so that's that's a simple view of Establishing value, but it really is simple and it may not really tell us everything. We need to know So when I consider the balance sheet, I mean one, it's a snapshot in time As you saw from the prior slide we can go back we can look at what we were doing historically and So perhaps as a shareholder potential investor, you might be interested in knowing the trend of shareholders equity For example, has it increased year-over-year for the past few years? That might be an indication that the business is generating funds for their investors But what this doesn't tell us is it doesn't really get into the detail of We know what the book value of assets are but that doesn't necessarily tell us what the assets are worth in the market Remember from an accounting perspective when we prepare financial statements when we do the balance sheet We take a conservative approach So on the balance sheet Assets are shown at acquisition value But if I bought that piece of property 10 years ago at a million dollars It'll be on the books at the acquisition value, but what's it really worth today? It could be worth less or it could be worth substantially more really won't know that till I take those assets and go into the Marketplace to see what the value is All right, so that's one area that we're really not sure exactly what that those assets are worth And it assumes that there's actually a market for the assets Imagine if you're a major manufacturing company and you have a million square foot manufacturing facility And you decide to put that on the market I'm guessing there's not a whole lot of immediate buyers that are interested in purchasing that amount of manufacturing space and if you if you look in Business news over the past couple years. You'll note that at any point in time. There's lots of Commercial real estate that's been sitting available for an extended period of time It obviously requires somebody that's going to have a need for those facilities and the cash to do an acquisition What about goodwill and brand equity that the firm has they're actually worth money not necessarily reflected on the balance sheet For example, I remember back when and teaching a course in marketing Had my class look at the brand equity of Coca-Cola A worldwide brand And the brand itself is estimated to be worth an excess of a billion dollars. That's not the assets in the company That's not the the bottling plants. That's the brand the brand equity Um and what are the prospects for the business is this a business that's in trouble Facing financial difficulties or is this a business that spends steadily growing year over year and has prospects for continued growth So we can't really see that from the balance sheet And yet it certainly has an impact on value of the business Now when we talk about the idea of corporate value, I want to stop here and make a note about fiduciary responsibility Now it's a it's a fancy word for as a former ceo of a publicly traded firm Um, I had a fiduciary responsibility to shareholders and to lenders fiduciary means that that as an executive of a firm with decision making authority And the authority to spend funds that's a position to trust Your shareholders the owners the lenders are trusting you to do what to make good decisions That means that before I make a decision there's an expectation that i'm going to exercise appropriate due diligence That means completely and thoroughly evaluate the decisions we're making now that sounds obvious And we might be inclined to say well, I'm got it, but everybody does that the bottom line is no they don't Um, and it certainly uh would not be uncommon to find executives making decisions that weren't necessarily in the best interest of shareholders Not me of course, but others and so due diligence really thinking about what you're doing evaluating the risks Doing appropriate risk mitigation and then making decisions that will be focused on Increasing the return for your shareholders All right at the end of the day. That's what you're what you're looking to do So fiduciary responsibilities and and anybody in a in a publicly traded firm Or those who are involved in taking other people's money have a fiduciary responsibility now Now that we've looked at that I want to go into the area of how do we further look to value business and what we're going to do is we're going to take a look at a couple of Uh pretty common models that are used to help us determine Um the value of the business We're going to look at the general overall idea of value of operations Remember the operations is the day to day operation of the business. What are you doing if you're manufacturing you're manufacturing goods You're putting them into the marketplace. You're generating sales. What's the value of operations? And then we also want to look at the idea of market value added And it really is a view of how the market sees what you're doing And economic value added Okay, so we're going to get into those as soon as I check and see if in fact there might be any questions on what I've talked about so far Um I have the wrong youtube pulled up. There we go So I was trying to fix something on the back end and now it looks screwy for people But everyone thinks fine. They just can't see me But we don't we don't have any questions right now But I'll just remind everyone that if you do have a question feel free to leave it in the chat okay Then continuing on with our discussion. Let's look at the value of operations And again, what are operations? It's what the company was set up to do So when we talk about the value of operations if you're an auto manufacturer Your operation is running assembly lines to produce automobiles And then get those out into your dealer organization for sale to the market What's the value of that operation The value is going to be the present value Okay, so now you know exactly where I'm going with this present value of Forecasts and free cash flows And what are we going to do because they're in the future? We are going to discount those future free cash flows by what? By the cost of capital Which you now know as whack or the weighted average cost of capital So um, if you look at this formula this this formula really basically is what is the present value? It's a pv formula. We're we're focusing specifically on free cash flow And we're focusing on our discount rate But I've added an additional parameter here and you'll notice this figure g And so let's talk about what that actually means She is the growth rate So we're forecasting free cash flow of 75 million dollars We have forecasted a growth rate of six percent here now. This is important because depending on what the growth rate is Is and it has an impact on multiplying or decreasing what the future cash flow looks like So we're going to incorporate a concept of growth in here And we've determined that our weighted average cost of capital is 14 Now I'm going to guess that at this point, especially after last week's presentation Everybody knows how to calculate the weighted average cost of capital Which simply says we're going to look at the capital plan of the business How much debt do we have and how much? Uh equity are we using that's the debt to equity ratio? What's the cost of each? And we're going to do the weighted average so our weighted average cost of capital is 14 So if our forecasted free cash flow is 75 million dollars We're anticipating a growth rate of six percent And our weighted average cost of capital is 14 What's the value of operations or what's the present value of that future stream of free cash flows? 994 million dollars Look how easy this is Now the real challenge isn't coming up with the number The real challenge is that as an executive You actually can do things to impact that number Either up or down Now i'm going to assume for a minute that your forecasts are correct Um remembering of course Is absolute You're looking to for tell what's going on Sorry, uh, sorry, Lou Uh, it looks like uh zoom hitched up there for a second. You had just said, um You were talking about assuming your forecasts are correct and then uh, and then we lost you there for like a sentence Okay So, uh, again, I'll assume that the forecast is correct Um, but we know it's not absolute and forecasts can be up or down But you've you've done due diligence and you've used Um appropriate economic models and so you've evaluated what the growth rate is going to be Now having said that what do you impact here? One that free cash flow Free cash flow is a result of revenue and expenses free cash flow increases If revenue goes up and expenses stay the same Or in pierce all's world if revenue increases and expenses decrease Because then it really goes up But you're making day-to-day decisions that have a direct impact on the generation of free cash flow So as you determine, um, what technology will be used in manufacturing? What materials you're using The quality you're building in the products the effectiveness of the product launches that you have the marketing and advertising campaigns Those are having an impact on free cash flow. That's number one. So you have an impact on that number two the um the cost of capital the weighted average cost of capital The executive team is making the decision on how much debt And how much equity that they're going to use There's a cost to debt There's a cost to equity and if you recall from our last presentation We actually went through and showed how you could you could make an analysis of the various costs You could analyze the different debt to equity ratios that are available to you And what were we looking for? We were looking for the optimum capital plan, right? The one that gave us the lowest weighted average cost of capital Why because you're going to be taking that 14 percent if that is lower Then the value of operations goes up If your cost of capital increases The value of operations goes down And so remember things like Your ability to maintain a business in good financial shape has an impact on the cost of debt If there is too much risk or too much leverage in the business Then the cost of equity increases And that will increase the weighted average cost of capital So this is a direct reflection of of decisions that you're making Okay, now Recognizing that we can look at the value of operations and we can see some impact from the decision making of our executives Then let's think about the fact that what we're really looking for As an executive team is one that's looking at value-based management. This isn't a complicated concept It simply said that as a former CEO myself When faced with decisions at a number of decisions that we're making Part of the decision-making process would be to answer the question if we do this What's the impact on value? Does value go up or does value go down? Now having said that, uh, I don't want to paint a uh an unrealistic picture here There are decisions we make when there will not be necessarily be an impact a positive impact to the value of the firm But we must make them For example, we talked about Evaluating the net present value of investment projects And we only want to invest in those that have a positive NPV But suppose that we have equipment that needs to be replaced I really have no choice but to replace the equipment. It's not furthering what we're doing It's simply recognizing we have old equipment has to be replaced with new equipment And it may not have a positive impact on creating new growth But it may at least enable us to sustain and maintain where we are So that is part of the decision-making process But having said that other decisions should be based on positive impact to a value So if we look at the market value added the market value is going to be How does the market see where we are? Remember, we're not in a we're not in a vacuum here. We're in the marketplace Um, our customers are looking at what we're doing Uh, competitors are looking at what we're doing Lenders are certainly looking at what we're doing Investors and shareholders are concerned And so how does the market value the decisions that I'm making in the operations of this business? Market value added is going to be impacted by things like growth and revenue Is the business increasing its revenue year over year? Now Obviously in almost any any business environment It's pretty difficult to maintain a year over year growth Some years are just going to be you're going to be lucky given Market conditions in the economic environment to kind of hold your own Sometimes there's a loss. Maybe because we're transitioning to a new market line or bringing in new technology for manufacturing Um, but those are our bumps in the road that management should be able to explain in the market If they're following what you're doing can either say that makes sense or it doesn't Generally speaking are we creating a growth and revenue? Does it from show signs that it's growing? Let's not forget profitability and specifically we're going to talk about operating profitability All right, and that's notepad and you can remember from our earlier reviews of financial that that was net operating profit after taxes So the profitability that we made from the operations of the business not external investments Or anything else but fine doing what we said we would do when we set up the company What about capital needs and the return on investing capital? um If businesses are not investing That may be an issue. It may be a problem One thing that that I think is interesting is that oftentimes we will look at the cash available to a firm If cash is increasing on the balance sheet period after period quarter after quarter if that's growing at some point Investors have a legitimate question to ask Why do we have so much cash available? Why aren't we investing the cash? so If if you have nothing to invest in as the firm here's a thought give me back some of my money because I can invest at some place else Remember investors are looking for a return on the cash. They give you So capital needs are we making appropriate investments to continue to sustain and grow the business? And of course, we've talked a great deal about the weighted average cost of capital These things are all impacted by decisions that management makes And they're all viewed in the marketplace As part of the way that we're going to make a determination on the value of the business So let's look at market value added and and what that actually means The formula here is pretty simple. It's the market value of shares minus the shareholders equity Now we these numbers are going to be readily accessible to us The market shares value of shares is simply What's the current price of a share of stock and how many shares outstanding are there? That tells us what the market is valuing the company at Minus shareholders equity because that's money that already belongs to the shareholders So what's the difference between what the market says the firm is worth? And the book value of the firm which is shareholders equity Think about that for a second Suppose the book value of the firm is one million dollars. That's owner's equity The market value of shares is one million five What is that actually telling us? Why is the market willing to pay? $500,000 more for a company who has a book value of a million dollars And that's because the market looks forward Market isn't looking at the business closing today. The market is looking at what the business has been doing What they're currently doing And where they're looking to go And in this case the market is saying we think there's additional growth potential here And so it's worth more than the book value of the firm Now that's a that's a pretty dynamic statement when you think about it And so what it means is that if the market value added is a positive number It means that we're obviously adding value for investors and potential investors are saying Yeah, we think there's more here to come Now what might that look like? Let's suppose that we have a price for our shares today trading on the market at $25 a share We have 50 000 shares outstanding And shareholders equity as we just saw from our balance sheet was $557,000 So what is the market value added or is there any added? The market value of the shares is one million two hundred and fifty thousand dollars. All right. That's the $25 times 50 000 shares minus shareholders equity $557,000 which means that the market value added for the company today is almost $700,000 Now remember that the the Part of market value that we we need to make sure we understand especially as managers and executives of businesses Is that that's really a reflection of past performance What we're currently doing and showing that we're doing and how we're projected to perform in the future So if you have ever considered investing stock in a firm I'm guessing that at the very least you're interested in how well are they performing? How have they done over the last few years? Is this business growing or is it shrinking? While some people might consider investing in a company that is going down For whatever reason most of us might be more interested in investing in companies that are going up And so market value added is a pretty important criteria to think about When we're when we're looking at business and again, it's a reflection Of the decisions that we have made in this business The market's evaluating those decisions and it's showing up in market value added Let's go to one more important valuation of the business and that's the economic value added Economic value added is basically no pet net operating profit after taxes And from that we're going to take the capital that was invested and the cost of capital Now for them to go much further without going all the way back to units one and two Remember that no pet or net operating profit after taxes is even Earnings before we pay interest in taxes. So if you look at the income statement You've got revenue We're going to take out all of our expenses Before we take out any interest in taxes And that's the earnings before interest in taxes So what is that number? Now times one minus the tax rate. So now we're going to take out taxes All right, so if they're if your tax rate if your corporate tax rate was 40 percent We're going to multiply that by 0.60 So ebit times one minus the tax rate And from that we will subtract The amount of equity used times the cost of equity the cost of capital Now note that no pet is the operating profit after taxes So it doesn't consider leverage. And so in this case, we're not going to consider interest payments on debt We consider that a financial decision the amount of debt you're using the interest you're paying is a financial decision It has an impact on financials But here what we're looking at is how much profit are you driving from the business you're doing and we'll address How much in debt and the leverage you're using after but what are we generating off the operation of the business? Now a positive economic value added number means what it means that the business is creating wealth for investors Unlike market value added Eba can actually be broken down and become more specific. I can calculate the economic value added for a particular period What was it last year? What is it this year? What is it this quarter? And I can even take it further and do a more in-depth analysis I can Calculate the economic value added for say part of the operation Rather than looking at the overall operation. I'm interested in how manufacturing is doing So we can we can take the appropriate numbers out of our financial statements and calculate the eba for operations Perhaps we're looking at at a product line We may have several product lines that are out there and we want to look at what's the impact of a particular product line This allows us to do that So again as part of pierce all's rule for fun with finance We can peel this down and we can look at analyzing and evaluating very specific parts of our operation And as somebody interested in value-based management, that's exactly what we're going to do We're interested in understanding the implications of all things right now If you're with me so far on the whole concept of value-based management I want to take uh and wrap this unit up with a with a Kind of a review of what are you going to do about it? remember the idea of Evaluation everything we've done so far Has been to tell us How well we've done All right, where where are you now? How does that compare to where you were last year? And what is your forecast show going forward? If you are looking and saying, I think we need to do more. What are you going to do about it? We actually have to think about Potential strategies that can help us create value in the firm So that's what I want to wrap this section up with and talking about some strategies for increasing value Um, some of these you're going to be familiar with they're they're not terribly uncommon depending on the size of the firm They can be rather complex innovation I've always been amazed with the concept of innovation, which is creating new ideas new products um I'd like to say that every business is focused on innovation or and many probably are but how do you get innovation? I mean even as president and ceo. I wasn't able to go out and tell folks go ahead innovate Innovation is part of a culture of an organization Have you created a culture where innovation is expected where it's rewarded? um, where where folks know that they are going to be looking to um That you are excited about innovation and new ideas So it's easier said than done and it takes a great deal of thought and management to really have an organization that can innovate What about the opportunities for diversification? We can diversify a number of things. We can diversify Uh, where our business is where we're doing business. We can diversify into markets We can diversify our product offering. Um, we are offering all product a is there an opportunity to expand the product offering And diversify into other areas other parts of the market that could be served Especially given what we have in terms of production capabilities and in-house skills Restructuring the business restructuring can can take a couple of of Processes one is we look to restructure perhaps financially if we're facing some financial difficulties Restructuring could mean that we have to look at restructuring our debt Seeing where we can Perhaps locate other sources of lending look where we have to pay down some that we can restructure our financial position But we can also restructure the business Should we restructure the firm in terms of how we operate? How we're organized um, do we need to increase uh, or add departments that are focused on customer satisfaction or manufacturing technology cutting-edge services Franchising is an opportunity is is the business lend itself to increasing revenue and expanding market presence perhaps by franchising some or all of the business So these are some basic business strategies Debt firms can be looking at and probably should be looking at on a regular basis But there are more complex strategies to consider um, especially for larger firms What we want to look at other ways to increase value There have been lots of discussions for on the m&a activity taking place on a global scale m&a or mergers and acquisitions now Mergers are when two companies decide that they can merge their operations The idea being when they come out of the merger that they will be bigger Uh, perhaps have more products to offer have expanded a customer base And will be a stronger company with increased revenues That's the idea whether or not that actually occurs. Um, is not necessarily uh, guaranteed That's excellent. Same with an equity side to actually acquire them outright I That one way to Let me cut in real quick. Uh, we we just had we just had another skip there a couple uh, couple sentences ago. Um, when you were talking about, uh The the merger them them working to get doing the same job together where we were like You're doing the same thing. Yeah, I'll pick it up from there. Um, I apologize for the glitch folks But let me just make sure you didn't miss anything On mergers and acquisitions when we merge we've got two firms coming together They're going to combine their resources. They're going to combine their technology their personnel their products And the idea is that at the other side of the merger, of course, you have a company that is bigger Has more revenue and has a greater market presence Not always but that's the theory behind a merger Or we can go to an acquisition where we actually acquire outright another company now, um The advantage of a good merger or acquisition Again, is that you're looking to make the business bigger Have a bigger market presence Be in a position to generate more revenue And perhaps reduce cost Now as as an executive who's been involved in merger and acquisition activities for a number of years Let me tell you that this is a lot more difficult than it looks and in fact, um studies on the after effects of mergers and acquisitions show That many more do not succeed than actually do achieve the results that we're looking for Why there's a lot of complexities in doing this think about a merger Itself you're going to merge two companies. They both agree. They want to join together And um and do business. Well, you've got duplicate staffs now Um, not every uh position. Do you need to have a duplicate board? Do you have you are you going to be able to operate two finance groups two accounting departments? um, and so the ability to manage And and and make sense of those And do that in a way that's profitable for the firm doesn't impact the uh, your presence in the market Uh, doesn't give competition an opportunity to step in are very complex um, so My experience tells me that these are entered into very carefully with a great deal of analysis And research and the most successful Mergers and acquisitions I've been involved when had a detailed and complex plan put together That said on day one Of the merger or on day one after the acquisition Here's the operating plan going forward that we were able to immediately implement into the business um, so Again, there have been volumes written on m&a activity, but it is a strategy for increasing value Strategic alliances is another strategy where we simply look to find a way to Work together with another business typically not a direct competitor But maybe somebody that has an auxiliary product or service where together we can present a Uh, a better or more unified View to the to the market and improve our customer service and our support joint ventures, um, was a good way especially for firms domestic firms looking to expand international um, and not necessarily having the expertise to go into a foreign country and open up an operation from scratch Not being familiar necessarily with regulations finance laws the marketplace joint ventures are a possibility where you go in and you partner with another company both have a a financial Responsibility to the firm And we benefit from local expertise as we consider Uh, for example, this is a good way to consider test testing our products and in markets that we're currently not serving So we can do a joint venture And the last is is divesting Um, especially with companies that have grown over time and maybe have a number of different operating divisions Um At some point in time it may be worth considering should we divest ourselves of this particular division of the company We want to focus our time our research and our efforts on this part of the business And so we will look to sell off. We're going to diversify and eliminate part here All of these potential decisions. These are all strategies That management can use when they're considering Um opportunities to increase the value of the business So lots of reasons for doing this Um, we've talked about some uh, sometimes we it's an opportunity to acquire new technology or a manufacturing process That someone else has that you think you would benefit from maybe a merger and acquisition gives you access to that increasing market share You've now if I if I buy a company that's the same size as I have I have effectively doubled my market share um ability to uh be a larger uh purchaser of goods and materials increase having access to a low larger global supply chain New access to new customers which provide new marketing opportunities new location. So lots of reasons to consider um Any of which may or may not be valid for you and your business as you look at it today But these are some of the the concepts we can use when we consider Not just measuring what our current value of of the business is but how I can go about increasing that value So what I want you to take away from this uh session today is Remember and I'll emphasize this again and again Management's responsible for making decisions. What how to increase value for shareholders owners and investors That's your job As a former president and ceo, I was hired by the board of directors. I reported to the board to do what? Create value for shareholders. That's my job Success at achieving these goals of increasing value can be measured as we've discussed And it ought to be part of your decision making process So when you're considering some of the decisions you might make You're going to consider. What's the implication on market value added? Or economic value added. It's as simple as that Now next week, we're going to look at the final chapter in our course, which is financial planning and forecasting So stay tuned for that and as always I'll wrap up with seeing if there are any questions or comments All right Well, we'll give everyone a second there to see if uh, if we get any questions coming in Of course, if you're watching these later, feel free to leave a comment down below and we'll get to it I'll either down there or in a later section. I just want to thank all the people that have joined us today Thank you very much. I'd like to obviously thank you, dr. Fierce over taking us through all of this and I'd like to thank me for my great knowledge But um, uh, I'm not I'm not seeing I'm not seeing any questions right now. Um, so I think we can go ahead and uh, just I'll just I'll do the close one more time and then if no one's got any questions, we'll get going But yeah, again, join us. Um, same time next week for uh, for unit seven So that'll that'll be good. And of course if you have any questions I said the question thing about comments in uh before So yeah, just thank you everyone for joining us and we'll see you the same time. Um, next week for unit seven So thank you everybody. Take care