The Stress Test Every Business Needs: A Capital Agenda for Confidently Facing Digital Disruption, Difficult Investors, Recessions and Geopolitical Threats
by Jeffrey R. Greene (Author), Steve Krouskos (Author), Julie Hood (Author), Harsha Basnayake (Author), William Casey (Author)

About the Author
JEFFREY R. GREENE
Leader, Corporate Development Leadership Network
Jeff leads EY's Corporate Development Leadership Network—an invitation-only, permanent roundtable of the heads of M&A, strategy, and inorganic growth for 40 of the largest companies in North America. For more than three decades, Jeff has counseled senior executives on the corporate finance implications of their strategic and operating decisions. His previous roles include Global Vice Chair—Corporate Finance and Global Transactions Leader for Life Sciences.
STEVE KROUSKOS
EY Global Vice Chair, Transaction Advisory Services, EY Global Limited
Steve has more than 25 years of experience in M&A, advising corporate and private equity clients on multibillion-dollar, cross-border transactions. He chairs the TAS Global Executive and is a member of the EY global board. Steve is also the senior advisory partner for several global EY accounts. He serves clients across a wide-range of industries spanning consumer products, industrial products, life sciences, transportation, technology, and communications.
JULIE HOOD
EY Global Deputy Vice Chair, Transaction Advisory Services, EY Global Limited
Julie leads global teams to help companies solve their most pressing business challenges, and better manage their capital across five connected solutions of strategy, corporate finance, buying and integrating, selling and separating, and reshaping results. She has advised clients across a broad range of industries, establishing a deep level of operational transactional understanding of organizations in Asia, Europe, and the Americas.
HARSHA BASNAYAKE
EY Asia-Pacific Managing Partner, Transaction Advisory Services
Harsha has more than 20 years of experience advising clients on complex cross-border transactions, as well as private and public sector capital decisions throughout the Asia-Pacific Region. His primary focus is in valuation, financial modeling, M&A, and restructuring. Harsha continues to be a practicing valuation professional and chairs the Council of the Institute of Valuers and Appraisers of Singapore.
WILLIAM CASEY
EY Americas Vice Chair, Transaction Advisory Services
Bill has 35 years of experience advising on capital strategy, mergers and acquisitions, spinoffs, IPOs, and securities offerings. As EY's Americas TAS leader and in prior roles, he has overseen a doubling of the practice to nearly 5,000 professionals. Bill has led some of EY's largest client engagements for multinational corporations and leading private equity firms in the US and Latin America.

About this book
Future-proof your business today for stronger performance tomorrow
The Stress Test Every Business Needs: A Capital Agenda for Confidently Facing Digital Disruption, Difficult Investors, Recessions and Geopolitical Threats provides a comprehensive approach to creating value and flexibility in an increasingly volatile business environment that presents both great risks and opportunities every day. The authors extend the banking “stress test” concept to a company’s Capital Agenda — how executives manage capital, execute transactions and apply corporate finance tools to strategic and operational decisions. Having a static Capital Agenda, however appropriate for your current market position, is not enough in today's uncertain world. Long-term success comes from building resilience into each element and in the way those elements interact.
The book uses a broader definition of business stress that includes traditional macroeconomic and geopolitical risks, as well as technological disruption, hostile takeovers and activist shareholders. Companies that make poor strategic decisions or underperform operationally will likely find themselves facing great stress. And that stress is symmetric; threats come from downside risks and from missed opportunities.
The chapters address the how and why of essential issues such as:

• Formulating corporate strategy in a digital world
• Pre-empting activist shareholders
• Restoring distressed companies to operational and financial health
• Ensuring effective collaboration among strategy, finance and operations
• Getting the most out of your advisors
• Proactively managing intrinsic value
• Rigorously allocating capital across the enterprise
• Acquiring and divesting for optimum value
• Syncing financing decisions with business strategy and capital market conditions
• Incorporating tax planning throughout the Capital Agenda
• Liberating excess cash with leading working capital management practices
• Aligning strategic goals and metrics to reach your company’s full potential
  

Companies that develop strategy and set operational priorities with a balanced Capital Agenda are best positioned to control their own destiny. The Stress Test Every Business Needs provides a roadmap to future-proof your business today for stronger performance tomorrow.

Table of contents
Chapter 1 How resilient is your Capital Agenda?  
    Framing decisions within the Capital Agenda
    The Capital Agenda’s building blocks
    Who can benefit from this book?
    Universal lessons from Allergan and Valeant
    Stress test your Capital Agenda
    Making the most of your Capital Agenda
    Performance improvement opportunities
    Navigating the book
    Notes
Chapter 2 Do you know the intrinsic value of your company and how to manage it?  
    Closing the gap between intrinsic and market value
    Common valuation applications
    Getting more value out of valuation
    Inconsistent applications of valuation
    Eight ways to minimize misuse and maximize effectiveness
    Cultivating a valuation mindset
    Notes
Chapter 3 Are you allocating capital across the enterprise to reduce C-suite stress?  
    Eight leading practices for allocating capital
    Evaluating individual investment opportunities: Quantify, debate, judge
    “Capital allocation is a contact sport”
    Notes
Chapter 4 Are your portfolio reviews timely, objective, and thorough?  
    Diagnosing the health of your portfolio management process
    Preparation drives value
    An acquisition perspective
    Approach ownership flexibly
    Implement world-class portfolio management
    Can “virtual” carve-outs show the way to cost reduction?
    Confront barriers to success
    Putting theory into practice
    Notes
Chapter 5 Do your acquisitions consistently pay off for shareholders?  
    An age-old M&A question
    Stress testing your M&A activities
    Lessons learned
    Notes
Chapter 6 Are you planning and executing divestments for maximum value?  
    Divesting is critical to your capital strategy
    What defines a successful divestment?
    Divestment guiding principles
    Leading sources of value erosion
    Can you increase business value before divesting?
    What does it take to close the deal and maximize value?
    Divesting for value
    Note
Chapter 7 Do your financing choices support flexibility and efficiency?  
    Use capital structure to facilitate business goals
    Assess your business through the capital lens
    Assess strategic financing alternatives
Chapter 8 How well does working capital management contribute to cash flow and earnings?  
    Why working capital matters
    Stress test your working capital proficiency
    Are you using outdated metrics?
    The psychology is harder than the math
    Next steps in the optimization journey
Chapter 9 Is tax a full partner in building resilience and driving value?  
    Key tax issues affecting business today
    Tax in the Capital Agenda
    Turning tax uncertainty into opportunity across the Capital Agenda
    Notes
Chapter 10 Are strategy, finance, and operations integrated for optimal value creation?  
    Day 1
    Strategy, finance, and operations integration
    Complex change will be a constant
    SFO integration creating value through M&A
    How urgent is your need for SFO integration?
    Stress testing your SFO integration
    It’s a journey, not a destination
    Notes
Chapter 11 How can you get the most out of your advisors?  
    Setting the context
    First principles
    When it is appropriate—and not appropriate—to use an advisor
    Hiring process
    Advisors as competitors and as peers
    How to start the relationship with an advisor
    Fourteen other leading practices (and what not to do) when hiring and managing advisors
    Beyond advisors to journey partners
    Note
Chapter 12 Can your strategy thrive in a digital world?  
    Extending the reach of digital
    Who’s the digital disruptor?
    Focus on seven dimensions of digital
    Feeling overwhelmed? Join the club. But there is a way forward
    This is for certain
    Note
Chapter 13 How can you pre-empt activist shareholders?  
    How activism has changed
    Four areas of focus for activists
    The best protection against activism
    What to do when the activist’s letter arrives
    Formulating your response
    We thought about that, too
    Activism is here to stay
    Notes
Chapter 14 How should you restore a distressed company to health?  
    Turnaround versus restructuring
    Recognizing corporate distress and the human dimension
    Marshaling the recovery
    Remaining in control
    Early detection is the best prevention
Chapter 15 Will your strategic goals ensure your company reaches its full potential?  
    A good strategy starts with setting the right targets
    Defining market context
    Setting margin targets using the Performance Gap
    Setting growth targets with the Opportunity Gap
    Aligning with investors via the Perception Gap
    Full potential value synthesis
    Notes

Length: 272 pages
Publisher: Wiley; 1 edition (August 28, 2018)
Language: English
ISBN-10: 1119417945
ISBN-13: 978-1119417941