Raising the Bar, Creating Wealth
Fail to meet the performance expectations of your friendly local banker and they may call you loan or at least make it impossible for you to get more capital to grow your business. Owners of smaller businesses generally have a limit to new investments. They have expectations and must see a future return. The business landscape is scattered with numerous consumer electronics dealers, and appliance retailers have learned this lesson the hard wayfamiliar names like Playback, Highland, Polk Bros. to name a few.
Think about the HOLT Framework as a better compass to use on your journey to wealth creation. Focus on earnings and earnings growth alone can lead to numerous mistakes. HOLT's Framework employs the concept of balancing a real measure of return (CFROI) with real asset growth to understand the current expectations built into the current stock price.
CFROI is an inflation adjusted real internal rate of return used by portfolio managers to value and select stocks. It is growing in use by business unit managers to select or reject capital investment proposals.