ICAS report on financial communication to investors

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24 Mar 2006

A report published by the Institute of Chartered Accountants of Scotland identifies seven categories of information that underpin good communication between listed companies and the markets and have the most direct influence a company's share price.

The seven are:
  • Information about the uncertain process of creating growth through strategic options (organic growth and takeover targets), over a long-term horizon.
  • Information on how new sources of additional value are created by new strategic options exercisable in the short-term to medium-term.
  • Information concerning new cash flows and earnings derived from the recent exercise of strategic options.
  • Information about the value arising from current operations, current trading and immediate growth.
  • Information regarding the way in which top management and the board, directly influence the level of expected cash flows and the risks in the three categories above.
  • Information on how top management and the board boost confidence in the company value-creation processes.
  • Information about the quality of corporate disclosure and its role in creating confidence about the company value-creation process.
The report is based on a series of interviews with large UK companies. Click for a summary of (PDF 54k).

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