Strategy, Value and Risk: Industry Dynamics and Advanced Financial Management
Jamie Rogers
Résumé
The current transformation of the global economy is being driven by new fundamental innovations, digitalization, industry dynamics and climate change. The impact of this transformation in terms of value migration, industry boundaries, investment and firm continuity is vast. The fourth edition of Strategy, Value and Risk examines these issues, and how they will influence firms and industries in the future. Those aspects of the business environment that will have a significant impact on strategy, business models, investments and value are identified, and the accounting, finance, economic and quantitative principles that provide a foundation for the analysis of these issues are discussed.
Part I: Strategy, Value and Risk provides the strategic, economic, accounting and financial framework. Strategy discusses technology and innovation, industry dynamics, globalization and industry concentration, climate change, industry boundaries and future value. Value discusses the accounting framework and corporate finance and investment, while Risk covers investment risk, corporate risk management and value and risk. Part II: Quantitative Analytics provides an overview of financial statistics, derivatives and derivative applications, and provides a background on the financial economics used in the analysis of physical, intangible, financial and energy assets. Part III: The Analysis of Investments, Transformation and Value examines platforms, data and analytics, the energy sector, pharmaceutical and biotech, a growth firm and media transformation, and applies the accounting, economic, financial and quantitative concepts.
This fourth edition lays out scenarios that will likely shape firms and industries in the future, and has relevance to CFOs, corporate finance and investment professionals. Business model disruption, data and analytics, intangible assets and dynamic analysis are now key issues within the CFO role. Investment professionals are required to see the larger economic environment in which firms compete, assess a firm's industry and its position within that industry, recognize which investments best serve its broad strategic goals and identify a firm's capabilities and options.
A background in the accounting, finance, economic, quantitative and valuation concepts that are relevant to the digital economy, new industries, business models and technologies is essential for finance professionals. This book addresses these issues within the context of the fundamental changes underway in the global economy, and provides applications of the techniques to illustrate the concepts.
CONTENTS
Part I Strategy, Value and Risk
1. Strategy
1.1 Strategy and value
1.2 The external environment
1.2.1 Technology and innovation
1.2.2 Industry dynamics
1.2.3 Industry and globalization
1.2.4 Industry and climate change
1.3 Transformation and the firm
1.3.1 Innovation and the firm
1.3.2 Industry boundaries
1.3.3 Strategy and the environment
1.3.4 Future Value
Appendix 1 - Classifying industry sectors today
References
2. Value
2.1 Overview
2.2 The accounting foundations
2.2.1 Stocks and flows
2.2.2 Ratio analysis
2.2.3 Residual earnings and free cash flow
2.2.4 Intangible assets and intellectual property
2.2.5 Pro forma analysis
2.3 Corporate Investments
2.3.1 Investment methods
2.3.2 DCF valuation
2.3.3 The Net Present Value Rule
2.3.4 Real Options
2.3.5 Valuing Real Options
2.3.6 Types of Real Options
2.4 Corporate finance
2.4.1 Overview
2.4.2 Theories of firm value
2.4.3 Developments in the theories of firm value
2.5 Optimizing the firm structure
Appendix 2 Modularity
References
3. Risk
3.1 Investment risk
3.2 Corporate risk management
3.3 The risk drivers
3.4 Value and risk
References
Part II Quantitative Analytics
4. Financial statistics
4.1 Time series analysis
4.2 Regression models
4.3 Volatility
4.4 The lognormal distribution
4.5 Volatility and the firm
References
5. Derivatives
5.1 Futures, forwards and options
5.2 The replicating portfolio and risk-neutral valuation
5.3 A model for asset prices
5.4 The Black-Scholes formula
5.5 Numerical techniques
5.5.1 Monte Carlo Simulation
5.5.2 The binomial and trinomial method
References
6. Derivative model applications
6.1 Spot price models
6.1.1 Geometric Brownian motion
6.1.2 Mean reversion
6.1.3 Jumps and seasonal patterns
6.2 Stochastic volatility
6.3 Forward Curve Models
6.3.1 A single factor model for the forward curve
6.3.2 The dynamics of the forward curve
6.3.3 The relationships between forward curve and spot price models
6.4 Convertible bonds
6.5 Compound options
6.6 Model risk
References
Part III The analysis of transformation and value
Overview
7. Platforms, data and analytics
7.1 Platforms
7.2 Cloud computing
7.3 Artificial intelligence
7.4 Quantum computing
7.5 Data
7.6 Analytical management
7.7 IT investments
7.8 Patent options
References
8. Energy
8.1 The global energy markets
8.2 Transformation of the energy sector
8.3 Natural gas and renewables
8.4 Energy Statistics
8.4.1 The Schwartz single factor model
8.4.2 Schwartz single factor futures and forward pricing
8.4.3 Volatility
8.4.4 Correlations
8.4.5 Simulating mean reversion
8.4.6 Estimating the mean reversion rates
8.4.7 The jump parameters
8.4.8 The half-life of a mean reverting process
8.4.9 Energy spot price model simulation
8.4.10 Wind power statistics
8.5 Natural gas generation valuation
8.5.1 Overview
8.5.2 Energy forward curves
8.5.3 Energy derivatives
8.5.4 Energy spread options
8.5.5 Natural gas peaking power plant valuation
8.5.6 Energy analysis and valuation
References
9. Pharmaceuticals and Biotechnology
9.1 Overview
9.2 New drug development
9.3 Valuation
9.3.1 The revenues
9.3.2 The research and development costs
9.3.3 The cost of capital
9.3.4 NPV valuation
9.3.5 The Expected NPV Valuation
9.4 The real options method
References
10. A Growth Firm
10.1 Overview
10.2 The valuation of growth
10.3 A growth case study
10.4 Growth options
10.5 A growth option case study
References
11. Firm transformation and divesture
11.1 Industry decline
11.2 Strategies in declining industries
11.3 Industry decline and transformation
11.4 Investor valuation of the abandonment option
11.5 An abandonment option case study
References
Jamie Rogers is a finance professional based in New York, USA. He has extensive experience in valuation, market risk management, analytics, and quantitative finance across equities, fixed income, currencies, commodities and energy within investment banking, big four accounting and advisory. He holds a Bachelor of Commerce from the University of NSW, Sydney, Australia.
Caractéristiques techniques
| PAPIER | |
| Éditeur(s) | Springer |
| Auteur(s) | Jamie Rogers |
| Parution | 24/09/2019 |
| Nb. de pages | 226 |
| EAN13 | 9783030219772 |
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