This article suggests that the time tested Altman Z-score, originally designed to predict corporate default represents considerable value when used as a corporate performance metric if measured continuously as opposed to one moment in time. Indeed, one could reason that if the measure has merit as a predictor of default, then it only make sense to manage the underlying drivers in order to optimize the ongoing viability of the firm. Used in this manner, this article argues that the Z-score should be considered more often in the corporate performance management setting. In addition, the article highlights the significance of the measure when crafting loan covenants to compliment other measures that are perhaps shorter term in nature. A generic framework is provided that illustrates the relationship of underlying drivers that contribute to the score, representing at least one approach to managing firm viability as a component of corporate strategy.
Providing transparent and accurate financial performance data to investors, partners and auditors is becoming increasingly important, if not critical for those engaged in the business of private equity and venture capital. In the recent past, this complex environment was tied together with a myriad of Excel® spreadsheets that served to aggregate, consolidate and report portfolio-company performance, making this task extraordinarily inefficient, costly and fraught with error. This paper will frame the problem in some detail and will offer several solutions designed to meet the needs of capital providers that seek to provide more accurate and consistent financial reporting to those that depend on it most.
Product Update Announcement
ClearMomentum announces the addition of new features that dramatically change and improve the manner in which CFOs manage loan covenants.
“ClearMomentum, Inc., a developer of CPM, Corporate Performance Management software and services announced the addition of new features that dramatically change and improve the manner in which CFOs manage loan covenants. The news marks the third major feature release this year as the company continues an aggressive 2008 product development schedule.
