Book

Description

This book reconstructs corporate economic performance as a sequence of productive capital states, operating returns, after-tax income, reinvestment, firm and equity cash flows, financing claims, and valuation representations. Its central proposition is that economic performance should be demonstrated before valuation is accepted as an informative representation of the enterprise. A historical review of classical political economy, marginalism, intertemporal choice, asset pricing, capital structure, shareholder-value analysis, and residual-income theory identifies the prior intellectual foundations of this proposition. The author-defined Closed-Loop framework then specifies admissibility conditions for capital-state continuity, return–income reconciliation, financing reversibility, claimant congruence, temporal alignment, and terminal-state integrity. Model C, a linked multi-sheet workbook covering 2005–2009 and continuing value, supplies author-reported controlled evidence: multiple FCFE routes and annual financing bridges, fixed-WACC DCF/EVA convergence, a terminal claimant reconciliation, and diagnostic divergence under broken-date floating-WACC conventions. The manuscript distinguishes algebraic equivalence, internal computational closure, economic admissibility, and independent external validation. Its contribution is a proposed integrated diagnostic and governance architecture rather than a new discovery of established valuation identities or proof of universally superior forecasting. The final chapters examine board oversight, bank credit, investment appraisal, spreadsheet assurance, and testable directions for multi-firm replication.