To give readers a break from technical details, this chapter demonstrates the model's usefulness in the form of an easy-to-appreciate summary grading system: HOLT's DualGrade Corporate Performance Scorecard for 2000 US companies, which is presented in Appendix C.

This performance scorecard can be used to: (a) quickly learn the relative rankings of firms for expected near-term and long-term performance, (b) initially assess a firm's managerial skill, (c) benchmark peers, (d) screen for buy/sell candidates, (e) test one's thoughts about an industry or firm, and (f) search for possible best practices .

DualGrade is a two-grade structure with one grade for expected near-term economic performance and one grade for expected long-term wealth creation as a percentage of total firm value. Possible grades for each characteristic are A through E, determined by the firm's quintile rank within its size category. The highest grade is AA; the lowest, EE.

Commentaries for example companies and general observations are presented to help readers interpret the dual grades. Insights can be gained from studying the grades for firms within industry groups.

A preview of the 5-year forecast window used in calculating warranted values and described in Chapter 7 is illustrated. With a +1-year forecasted CFROI level, the model can be used to translate a firm's stock price into the market's implied +5-year CFROI level for the firm. In a graphical presentation, a line connecting the +1-year and +5-year CFROIs visually displays the market's forecasted...