Financial Assessment Methodology

Financial Assessment Methodology to Maximize Value – Create Opportunities for New Revenue and Untapped Growth

Old Way of Thinking: Government and Public Policy Hurts Business and Limits Potential:

• New laws and excessive regulations impede growth
• Government dysfunction causes immense uncertainty
• Partisan Political arguments ignore business realities
• Politicians look out for themselves only

A New Approach to Government and Public Policy – Create Opportunities to Maximize Net Present Value (NPV) of Each Line of Business and Total Enterprise

The Kitchens New Cleghorn Financial Assessment Methodology:

Step 1: Creating and winnowing those “material” company lines of business having potential public policy exposure

Step 2: Identify product/service-specific risks in the Public Policy environment

Step 3: Reaching an unbiased, informed assessment of the range of Public Policy outcomes

Step 4: Marshaling internal resources to measure potential NPV gains or losses from different policy scenarios

Step 5: Determine the chances of success of obtaining (or risk suffering) each outcome

Step 6: Ordering Targets by real likelihood of obtaining a favorable NPV result

Key Questions of the Financial Assessment Methodology

Business Owners

• What is your current approach to regulation with regard to specific products/services?
• Does government policy help or hinder that product/service? Does it impact your competition?
• If expanding or enhancing a product/service, can government policy help or hinder it?
• Are there any products/services you’re not pursuing because laws and regulations won’t allow it?

Strategy and M&A Experts

• Are there any coming or likely strategic changes that would impact particular products/services as to revenue income?
• Are there any new strategic initiatives that could impact the regulatory needs of your organization?
• Are there any current regulatory assumptions known to be built into the strategic plans of your organization?

Public Policy Experts

With respect to each key regulatory issue:

• What are known positions of policymakers and others?  Who are likely allies and opponents?
• What is your organization’s game plan for each issue?
• What resources would your organization need for the plan to succeed?  How long would it take?
• What is the probability that your organization can achieve its preferred regulatory environment?

Financial Experts

With respect to each key regulatory position, will the NPV of your organization’s current business increase or decrease if your organization devotes the necessary resources to:

• Maintain the regulatory status quo
• Lessen regulation
• Impose additional regulation