Luddite and Market value added: Difference between pages

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imported>Doug Williamson
(Create the page. Sources: The Treasurer, March 2017, p03, Collins English Dictionary, Oxford English Dictionary.)
 
imported>Doug Williamson
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Luddite is a disparaging term for a person who opposes technological change or other innovation.
(MVA).  


The excess of the actual or theoretical market value of a firm over its book value.


<span style="color:#4B0082">'''''Artificial intelligence (AI) - should it worry us?'''''</span>


:"... as Sally Percy argues, AI is full of possibilities - capable of bringing enhancements to treasury operations that won't detract from treasurers' own analytical skills - far less their intuitive ones.
'''Example'''


:Indeed, it seems likely that treasurers will find themselves in an enhanced role, freed up to manage exceptional issues - the ones where their judgement is the deciding factor.
Using a simplified example, for an all-equity financed firm with an actual or theoretical market capitalisation of $130m and book value of equity $100m:


:No Luddites here."
MVA = $130m - $100m


:''The Treasurer magazine, March 2017 p3 - Editor's letter.''
= $30m.




======Origin======
In practice a number of adjustments would be made both to the market values and to the book values used in the calculation of the MVA. 


The English ''Luddites'' destroyed industrial machinery which they believed was threatening their jobs, in the period 1811 to 1816.
So in practice the assessment of MVA is both more complicated, and arguably more subjective, than the simple calculation illustrated above.




== See also ==
== See also ==
* [[Artificial intelligence]]
* [[Book value]]
* [[Information technology]]
* [[Economic value added]]
* [[Excess Return]]
* [[Market value]]
* [[Shareholder value]]

Revision as of 16:31, 16 March 2015

(MVA).

The excess of the actual or theoretical market value of a firm over its book value.


Example

Using a simplified example, for an all-equity financed firm with an actual or theoretical market capitalisation of $130m and book value of equity $100m:

MVA = $130m - $100m

= $30m.


In practice a number of adjustments would be made both to the market values and to the book values used in the calculation of the MVA.

So in practice the assessment of MVA is both more complicated, and arguably more subjective, than the simple calculation illustrated above.


See also