Method of and system for defining and measuring the real options of a commercial enterprise

A computer readable medium having sequences of instructions stored therein, which when executed cause a processor to perform a method for continuously valuing one or more real options of a business enterprise, comprising:

• obtaining data related to the elements of value, real options and value of the business enterprise and its competitors;
• determining, which elements of value are causing enterprise stock price changes;
• calculating for each causal element of value the relative ranking of each causal element vis a vis firms competing with the enterprise,
• calculating the appropriate discount rate for use in valuing the real options and contingent liabilities as a function of the relative causal element strength, and calculating real option values.

A computer sys tem, comprising:

• a processor having circuitry to execute instructions;
• a storage device coupled to the processor and having sequences of instructions stored therein, which when executed cause the processor to,
• obtain data related to the elements of value, real options and value of the business enterprise and its competitors;
• determine, which elements of value are causing enterprise stock price changes;
• calculate for each causal element of value the relative ranking of each causal element vis a vis firms competing with the enterprise,
• calculate the appropriate discount rate for use in valuing the real options and contingent liabilities as a function of the relative causal element strength, and calculate real option values.

A computer-implemented method for continuously valuing the elements of value of a business enterprise, comprising:

• obtaining data relative to the value of the enterprise and its competitors,
• identifying causal value drivers by element of value,
• determining the relative impact of causal value drivers on the current operation cash flow of the enterprise by element of value,
• determine the elements of value that are causal to stock price movement,
• determining the value impact of causal elements of value on the real options of the enterprise, and
• calculating the value of the element of value by adding the impact of the element of value on the real options of the enterprise with the product of the relative impact of the element of value on current operation cash flow and the enterprise current operation cash flow.

A computer readable medium having sequences of instructions stored therein, which when executed cause a processor to perform a method for continuously valuing the elements of value of a business enterprise, comprising:

• obtaining data relative to the value of the enterprise and its competitors,
• identifying causal value drivers by element of value,
• determining the relative impact of causal value drivers on the current operation cash flow of the enterprise by element of value,
• identifying causal elements of value for stock price movement,
• determining the value impact of causal elements of value on the real options of the enterprise, and
• calculating the value of the element of value by adding the product of the relative impact of the element of value on current operation cash flow and the forecast enterprise cash flow with the impact of the element of value on the real options of the enterprise

A computer system, comprising:

• a processor having circuitry to execute instructions;
• a storage device coupled to the processor and having sequences of instructions stored therein, which when executed cause the processor to,
• obtain data relative to the value of the enterprise and its competitors,
• identify causal value drivers by element of value,
• determine the relative impact of causal value drivers on the current operation cash flow of the enterprise by element of value,
• identify causal elements of value for stock price movement,
• determine the value impact of causal elements of value on the real options of the enterprise, and
• calculate the value of the element of value by adding the product of the relative impact of the element of value on current operation cash flow and the forecast enterprise cash flow with the impact of the element of value on the real options of the enterprise