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How we measure value · Purchase price variance to earnings at risk

Measured in your numbers.

Each team keeps the metric it reports today. Vadar Alpha ties those metrics to margin, and margin to earnings, against a baseline your finance team agrees on.

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How we measure value

Measured in terms your business cares about.

Each team keeps the metric it reports today. Those metrics move your margin, and your margin moves your earnings.

What leaders are paid on
▲ Earnings added

How much more the business earns.

Adjusted EBITDAAdjusted earnings per shareFree cash flowEconomic value addedNOPAT
▼ Earnings at risk

How far the year could fall below plan.

EBITDA at riskEarnings per share at riskEarnings per dollar at riskRAROC
What each team is measured on
BUY
Purchase price variance
Timing captured
Days in inventory
MAKE
Yield
Cost per unit made
Component recovery
SELL
Win rate
Net price realization
Cost pass-through
RISK
Value at Risk within limits
Profit per dollar at risk
Protection delivered
How we create value
SpreadChoosing the best available option.
TimingActing when prices move your way.
SpeedCutting the time from signal to decision.
Error rateRemoving manual mistakes.
Risk premiumLeaving less exposure unmanaged.
HoursGiving your teams time back.
Questions

Questions we hear most.

What baseline do you measure against?

One your finance team agrees on before we start, such as your budget, your standard cost or your current buying and hedging policy. Every result is reported against it.

Do our teams have to change their KPIs?

No. Each team keeps the metric it reports today. Vadar Alpha adds the link from that metric to margin and earnings.

What is earnings at risk?

How far earnings could fall over a period from market moves, at a chosen level of confidence. Vadar Alpha reports it in dollars, before and after each decision.

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See what your margin could be.

A 30 minute conversation to see where your margin leaks and whether we can help.

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