Building

Shareholder

Value

Value Added

It's easy to cut costs by reducing quality or service. But if you're looking for that approach or satisfied with cutting costs by sacrificing quality, then there's no need to call us. Anyone can cut corners and reduce your costs. What we do is increase the value of your business– that's why we're called ValueNet, not PriceNet. We look for the same or better quality at reduced cost. Or, we improve processes that boost product-ivity or make some purchases completely unnecessary. To understand what that's worth, think about how much you have to sell to produce a dollar of pre-tax profit now. If you have a 20% pre-tax margin, then every dollar you save has the same profit impact as a five-dollar increase in sales. The value of that should be pretty clear.

Shareholder Value Calculator

We invite you to examine the impact of retaining ValueNet for your company’s  shareholders. The attached schedule allows you to calculate that impact yourself.

Step 1:  Insert the annual amount of a particular area you suspect is eligible for cost savings such as office supplies, photocopier expense or telecommunications costs.

Step 2:  Select an estimate of the potential savings rate. For purposes of illustration select a rate less than the 35.8% achieved last year by ValueNet.

Step 3:  Insert your current corporate tax rate.

Step 4:  Insert the price earnings ratio for your firm if publicly traded, or a similar firm that is publicly traded, or an estimate of the valuation multiple you would use in valuing your company.

Step 5:  Press the calculate button.

The results should be self-evident. The increase in after tax income and business value from this exercise and the total value added to shareholders can be impressive. However, the real power of this illustration is the ratio of increase in shareholders’ value to the share of savings paid to ValueNet. In addition, we guarantee that this ratio will be achieved provided the assumption you inserted in Steps 1-4 hold true.

Can you tell me more about what to expect from a ValueNet engagement?

Contact ValueNet Canada Consulting Inc.