Strategic Value and SC Value Added
We use market and company financial data to make a distinction between operating value and strategic value. Operating value (OV) is based on current profitability (NOI) and operating capital (OC). More precisely:
OV = PV of NOI + OC.
Since investors value both current and potential future profitability, their expectations of future profits are built into our share price. From that, we can track strategic value (SV) as the difference between market value (MV) and operating value, or:
SV = MV - OV.
By determining strategic capital (SC), i.e., capital not used in calculating NOI, and subtracting that from strategic value, we get the value added on strategic capital (SCVA), or:
SCVA = SV - SC.
Through the promise of new services and wise management of our strategic assets, we seek to grow investor expectations of future profitability (DSCVA) .
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