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Conglomerate Discount
Conglomerate discount is an economic concept describing a situation when the stock market values a diversified group of businesses and assets at less than the sum of its parts. The explanation of this phenomenon comes from a conglomerate's inability to manage various and different businesses as well as do focused companies. Therefore, the market penalizes a multi-division firm and attaches a lower multiple to its earnings and cash flows, thus creating the discount. However, the opposite concept, called conglomerate premium, also exists. Developed vs emerging markets In the developed economies, the average value of the discount may be 13–15% relative to single-segment competitors. Because of the discount, conglomerates have become much less common in the developed markets than they once were. Only several star performers, such as Berkshire Hathaway, have managed to escape the market’s critical assessment of overdiversification. However, conglomerates are still common in a numbe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stock Market
A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include ''securities'' listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind. Size of the market The total market capitalization of all publicly traded securities worldwide rose from US$2.5 trillion in 1980 to US$93.7 trillion at the end of 2020. , there are 60 stock exchanges in the world. Of these, there are 16 exchanges with a market capitalization of $1 trillion or more, and they account for 87% of global market capitalization. Apart from the Australian Securities Exchange, these 16 exchanges are all in North America, Europe, or Asia. By country, the largest stock markets as of January 2022 are in th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Sara Lee Corporation
The Sara Lee Corporation was an American consumer-goods company based in Downers Grove, Illinois. It had operations in more than 40 countries and sold its products in over 180 countries. Its international operations were headquartered in Utrecht, The Netherlands. While no longer operated independently, as of 2020, Sara Lee still exists as a current brand name under the auspices of holding company Kohlberg & Company, making frozen cakes, etc. at its present facility in Illinois, United States. Sara Lee is also the brand name of a number of frozen and packaged foods, often known for the long-running slogan "Everybody doesn't like something, but nobody doesn't like Sara Lee," often incorrectly reported as "Nobody does it like Sara Lee". As of 2005, Sara Lee Corporation had operations in more than 40 countries; sold food, beverage, and household products in over 180 countries; and had some 137,000 employees worldwide. On July 4, 2012, Sara Lee Corporation was split into two compani ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Corporate Finance
Corporate finance is the area of finance that deals with the sources of funding, the capital structure of corporations, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to Shareholder value, maximize or increase valuation (finance), shareholder value. Correspondingly, corporate finance comprises two main sub-disciplines. Capital budgeting is concerned with the setting of criteria about which value-adding projects should receive investment funding, and whether to finance that investment with ownership equity, equity or debt capital. Working capital management is the management of the company's monetary funds that deal with the short-term business operations, operating balance of current assets and Current liability, current liabilities; the focus here is on managing cash, inventory, inventories, and short-term borrowing an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Multi-divisional Form
Multi-divisional form (also known as M-form or MDF) refers to an organizational structure by which the firm is separated into several semi autonomous units which are guided and controlled by (financial) targets from the center. Overview Multi-divisional forms that are all part of a single legal entity (Chandler 1962, 1977, 1990). Although the corporation is controlled by management located in the central office, most operating decisions are left to autonomous divisions. Generally, the central office will provide services such as managerial expertise and capital for the divisions. The multidivisional form (M-form) is a particular organizational structure in which a firm is divided into semi-autonomous divisions that have their own unitary structures. The firm is essentially divided into corporate entities with each being responsible for a component of the production product or product line (Chandler 1977). Top management is located in the central office where they coordinate the div ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Zaibatsu
is a Japanese language, Japanese term referring to industrial and financial vertical integration, vertically integrated business conglomerate (company), conglomerates in the Empire of Japan, whose influence and size allowed control over significant parts of the Japanese economy from the Meiji period until the end of World War II. A ''zaibatsu'' general structure included a family-owned holding company on top, and a bank which financed the other, mostly industrial subsidiaries within them. Although the ''zaibatsu'' played an important role in the Japanese economy from the 1860s to 1945, they increased in number and importance following the Russo-Japanese War of 1904–1905, World War I and Japan's subsequent attempt to conquer East Asia during the inter-war period and World War II. After World War II they were dissolved by the Occupation of Japan, Allied occupation forces and succeeded by the ''keiretsu'' (groups of banks, manufacturers, suppliers, and distributors). Equivalents ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Keiretsu
A is a set of companies with interlocking business relationships and shareholdings. In the legal sense, it is a type of informal business group that are loosely organized alliances within the social world of Japan's business community. The ''keiretsu'' system dominated the Japanese economy for the second half of the 20th century, following the dissolution of the ''zaibatsu'' after World War II, and, to a lesser extent, continues to do so in the early 21st century. The members' companies own small portions of the shares in each other's companies, centered on a core bank; this system helps insulate each company from stock market fluctuations and takeover attempts, thus enabling long-term planning in projects. It is a key element of the manufacturing industry in Japan. History The prototypical ''keiretsu'' appeared during the Japanese economic miracle which followed World War II, amid the dissolution of family-controlled vertical monopolies called ''zaibatsu''. The ''zaibatsu' ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chaebol
A chaebol (, ; ) is a large industrial South Korean conglomerate run and controlled by an individual or family. A chaebol often consists of multiple diversified affiliates, controlled by a person or group whose power over the group often exceeds legal authority. Several dozen large South Korean family-controlled corporate groups fall under this definition. The term first appeared in English text in 1972. Chaebols have also played a significant role in South Korean politics. In 1988, a member of a chaebol family, Chung Mong-joon, president of Hyundai Heavy Industries, successfully ran for the National Assembly of South Korea. Other business leaders were also chosen to be members of the National Assembly through proportional representation. Hyundai has made efforts in the thawing of North Korean relations, despite some controversy. Many South Korean family-run chaebols have been criticized for low dividend payouts and other governance practices that favor controlling shareho ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Associate Company
An associate company (or associate) in accounting and business valuation is a company in which another company owns a significant portion of voting shares, usually 20–50%. In this case, an owner does not consolidate the associate's financial statements. Ownership of over 50% creates a subsidiary, with its financial statements being consolidated into the parent's books. Associate value is reported in the balance sheet as an asset, the investor's proportional share of the associate's income is reported in the income statement and dividends from the ownership decrease the value on the balance sheet. In Europe, investments into associate companies are called fixed financial assets. Associate value in the enterprise value equation is the reciprocate of minority interest. Under the UK Companies Act 2006 The Companies Act 2006 (c 46) is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. The Act was brought into force in stages, with t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Subsidiary
A subsidiary, subsidiary company or daughter company is a company owned or controlled by another company, which is called the parent company or holding company. Two or more subsidiaries that either belong to the same parent company or having a same management being substantially controlled by same entity/group are called sister companies. The subsidiary can be a company (usually with limited liability) and may be a government- or state-owned enterprise. They are a common feature of modern business life, and most multinational corporations organize their operations in this way. Examples of holding companies are Berkshire Hathaway, Jefferies Financial Group, The Walt Disney Company, Warner Bros. Discovery, or Citigroup; as well as more focused companies such as IBM, Xerox, and Microsoft. These, and others, organize their businesses into national and functional subsidiaries, often with multiple levels of subsidiaries. Details Subsidiaries are separate, distinct legal entities f ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Holding Company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies to form a corporate group. In some jurisdictions around the world, holding companies are called parent companies, which, besides holding stock in other companies, can conduct trade and other business activities themselves. Holding companies reduce risk for the shareholders, and can permit the ownership and control of a number of different companies. ''The New York Times'' also refers to the term as ''parent holding company.'' Holding companies are also created to hold assets such as intellectual property or trade secrets, that are protected from the operating company. That creates a smaller risk when it comes to Lawsuit, litigation. In the United States, 80% of stock, in voting and value, must be owned before tax consolidation benefits s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Consolidation (business)
In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into a few much larger ones. In the context of financial accounting, ''consolidation'' refers to the aggregation of financial statements of a group company as consolidated financial statements. The taxation term of consolidation refers to the treatment of a group of companies and other entities as one entity for tax purposes. Under the Halsbury's Laws of England, 'amalgamation' is defined as "a blending together of two or more undertakings into one undertaking, the shareholders of each blending company, becoming, substantially, the shareholders of the blended undertakings. There may be amalgamations, either by transfer of two or more undertakings to a new company or the transfer of one or more companies to an existing company". Overview Consolidation is the practice, in business, of legally combining two or more organizations into a single new one. Upon consolidation, the original ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Media Conglomerate
A media conglomerate, media group, or media institution is a company that owns numerous companies involved in mass media enterprises, such as music, television, radio, publishing, motion pictures, theme parks, or the Internet. According to the magazine ''The Nation'', "Media conglomerates strive for policies that facilitate their control of the markets around the world." Terminology A conglomerate is a large company composed of a number of smaller companies ( subsidiaries) engaged in generally unrelated businesses. Some media conglomerates use their access in multiple areas to share various kinds of content such as: news, video and music, between users. The media sector's tendency to consolidate has caused formerly diversified companies to appear less diverse to prospective investors in comparison with similar companies that are traded publicly and privately. Therefore, the term media group may also be applied, however, it has not yet replaced the more traditional term. Crit ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
