According to PricewaterhouseCoopers’ landmark study of market valuation in the retail industry
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Retailing & consumer Reporting in the 21st century —
there has been a strong tendency to undervalue companies in the retail and consumer goods industry. One of the reasons is that intangibles, such as brand value and customer loyalty, have traditionally not been included as performance benchmarks. The widespread implementation of IFRS (International Financial Reporting Standards), which will enable international, industry-specific comparisons, will likely have significant effects on the market value of retail and consumer companies.
The corporate financial failures that have occurred over the past few years have called into question not only the intrinsic value of a company, but also the systems that have been used to determine and communicate corporate performance. The ability to understand and align the substance and the form of new reporting standards, such as IFRS, and to address stakeholders’ expectations will be critical to enhance transparency and restore public trust in the retail and consumer goods industry.
How PricewaterhouseCoopers can help you
PricewaterhouseCoopers’ retail and consumer industry professionals can help your company deal with market valuation issues in three important ways:
- Our global team of IFRS specialists — dedicated to the retail and consumer sector — can help you ensure consistent execution of IFRS transition projects across your company.
- PricewaterhouseCoopers’s proprietary Value Reporting framework provides a comprehensive methodology to evaluate performance and to structure communications about performance to the market.
- Our communications professionals can assist you in controlling risks and optimising the management of your financial communications through managing relations with financial market authorities and rating agencies, monitoring regulatory changes, benchmarking against industry peers, or outsourcing in whole or in part your financial communication function.
