Corporate (Group)
Strategic Balance Sheet

View Template for: Corporate (Group) Strategic Balance Sheet

The purpose of this section is to complement traditional financial analyses with measures of strategic health that are not presented in standard financial statements alone.

Two companies with identical financial statements are not necessarily equal. One company could be on the verge of a major upturn, the other could be out of business next year. Financial statements are important, but they alone do not tell the whole story regarding the health of a company. Too often, financial statements are views of the past; and they are subject to (fully legal) manipulation by accounting procedures.

The purpose of the consolidated strategic balance sheet is to make up for the deficiencies of the consolidated financial statements by specifically measuring those things which are relevant to the health of a company and not presented in the financial statements.

The example consolidated strategic balance sheet shown on the template web page should be customized to meet the needs of your company.

For example, a consolidated strategic balance sheet for a commercial bank might include a line item for its "community reinvestment rating." An automobile company might include "relationship with labor union" and "percent of vendors using electronic data interchange."

Example of Consolidated Balance Sheet for Diversified Company XYZ

Strategic Assets	Weight Factor	2002	2001	2000
"	.	.	.	.
"	.	.	.	.
Corporate Culture	4	Real Cooperation	Forced Teamwork	Compet-  itive
Sharing Between  Businesses	4	Moderate	Some	None
Cross-Selling Between  Businesses	4	20% New Sales	12 % New Sales	10% New Sales
I/T Infrastructure	4	Streamlined	Confused	Simple
Board of Directors  Effectiveness	4	Effective	Nil	Nil
Influence of Shareholders	3	Positive	Nil	Nil
Corporate Credit Rating	5	A	B	B
Net Income / Employee	5	$53,000	$47,000	$43,000
"	.	.	.	.
"	.	.	.	.

There are sometimes other strategic balance sheet items that should be discussed, even if not written down. For example, relationships with influential people in government and industry could be a major asset. Being the friend of, or being related to, the minister of finance of country XYZ clearly has value if your company is planning to expand in that country.

In short, all factors which affect the strategic health of the company should be measured and analyzed, and not overlooked because they are not listed on traditional financial statements.

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Copyright 2008 Alan S. Michaels               Alan S. Michaels    All Rights Reserved.
Last modified:   Tuesday February 19, 2008