Private sector entities

In this lesson

1. 0:00 Strategic performance measures introduction
2. 0:26 Private sector entities and profit objectives
3. 1:02 Shareholder wealth maximisation explained
4. 2:00 WACC and shareholder value creation
5. 2:46 Long-term versus short-term profit focus
6. 3:27 Total shareholder return as key metric
7. 4:08 Calculating dividend yield and capital gains

About this lesson

We cover the key financial objectives of commercial organisations, exploring how shareholder wealth is maximised through both dividends and share price growth, and why long-term sustainable profit matters more than short-term gains. You'll discover the critical relationship between return on invested capital and weighted average cost of capital (WACC), and how total shareholder return—combining dividend yield and capital gains—provides a comprehensive measure of whether management is truly creating value for shareholders. This lesson is essential for APM as it establishes the foundation for understanding strategic performance measurement in the private sector. You'll see why focusing solely on short-term profit can actually destroy shareholder value, and how investment decisions today drive tomorrow's share price. By the end, you'll be able to explain the difference between financial performance in the short and long run, and confidently use total shareholder return as a key performance indicator when analysing or advising on corporate strategy.

Duration: 5m