Industrial financial performance

In effect, a growing imbalance between shareholder expectations for continued shortterm financial performance and the longer-term needs of the industry to change its operating model to deliver new product innovations is resulting in increased tension. 

The reward criterion covers those areas related to the expected financial performance of the project. An important method for determining the financial success of a project is the net present value (NPV) calculation. This method calculates the present value of future cash flows. If the NPV is positive, the investment is beneficial from a financial standpoint. Additionally, a financially successful project is expected to have an average return on capital employed (ROCE) above a selected level, which makes commercial sense with regards to industry/branch standards. 

The advantages of increased focus are apparent in other process-intensive industries. In pulp and paper, for example, there is a strong correlation between a company s degree of focus and its financial performance. None of the industry s top performers (as measured by shareholder returns) competes in more than five different segments. 

The interplay of this complex mix of hard and soft factors is best understood by applying a business dynamics approach. A business dynamics model can, for example, simulate the cost structure, economics and investment behavior of a group of players in a commodity industry. The output is the financial performance of the industry - and even of individual players - over time. 

Previously, the paradigm of the pharmaceutical industry required companies to be vertically integrated, i.e., the company itself performed all the operations required of its business. Now investors are demanding continued high financial performance. In an effort to... 

Special Features Environmental factors most directly associated with financial performance and competitiveness. Its Industry Benchmark Reports provide direct comparison of companies in more than 50 industries. It is the leading source for the assessment of firms competitiveness in strategic environmental management. 

Pfizer s performance in the 1970s and 1980s is reviewed in detail in Taggart, World Pharmaceutical Industry, pp. 206-230. Especially useful are tables featuring Pfizer s financial performance, revenues by product segment, and country markets, as well as R D expenditures. 

This chapter introduced the basic elements of accounting, which readers are likely to encounter in industry. From accounting records and internal reports, the financial data ultimately become part of the balance sheet or the income statement. The various tenns in the balance sheet and the income statement were defined, and an illustration of these documents for a typical company was presented. This information should allow readers to determine how well a company has done and is doing. All annual reports contain footnotes, which explain how changes in the financial infonnation and pending litigation could affect the financial performance of the company. The lOK report was mentioned because it provides the source of the detailed backup financial information not in the annual report. 

Examples of the use of analytical chemistry techniques are drawn from such areas as life sciences, clinical chemistry, air and water pollution, and industrial analyses. Analytical chemistry becomes meaningful when you realize that an incorrect blood analysis may endanger a patient s life, or that an error in quality control analysis may result in serious financial loss for a manufacturer. Millions of dollars are saved in the chemical industry by performing on-line automated analyses of chemical processes, to assure maximutn efficiency in chemical production. 

From a niche market socially responsible investment as an integrative approach (integration of ESG issues with industrial analysis and valuation on a sector-by-sector basis to identify [mid- and long-term] investment opportunities) has now definitely entered the mainstream arena,with a particular focus on the link between ESG issues and financial performance. 

The last three points deserve particular attention industrial stakeholders such as governments, public interest groups, environmental, legal and financial consultants, as well as banks and other financial institutions are increasingly asking for information on industrial environmental performance when making investment decisions and selecting products. 

Other social controls indirectly influence industrial safety performance, such as laws and norms for corporate governance that cause companies to inform shareholders and potential investors about corporate activities so they can make informed decisions about financial risks. If the activities are hazardous, these sources of financial support may need to be convinced that their financial risks are held to acceptable levels by evidence of effective safety management, which thereby makes it necessary for companies to develop and implement codes of conduct and safety management practices that adhere to industrial standards and comply with government regulations. ... 

In the remainder of this chapter, we examine the experiences of the case study industries in critical safety-related areas to help determine how the ongoing deregulation or restructuring of the electricity industry is likely to affect future operations, safety, and financial performance of nuclear power plants. In particular, we examine the following issues ... 

In the rail industry, one of the primary factors conducive to safety was simply the improved financial performance of the industry after deregulation. While this improved financial condition was clearly the result of deregulation, it was largely due to the distinctive character of the regime by which railroads... 

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