DOCSLIB.ORG

Principles of Valuation

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Principles of Valuation butler 3e 10 auto 7/24/14 11:05 AM Page 565 Chapter X Principles of Valuation Market prices are often viewed as the best measure of the value of a good or service. Because market prices can be determined objectively and generally cannot be manipulated, they are often relied upon to generate unbiased, independent measures of value. Obviously, market prices are important in many legal contexts, whether they are used for filling gaps in contracts or determining the appropriate compensation for governmental takings of property. However, in many legal situations, adequate market indicators are not available and surrogates for market value must be calculated. This chapter focuses on the concept of the time value of money — that cash flows received at earlier points in time are worth more than cash flows received at later points in time. Among these concepts are prejudgment interest calculations — the methodology for determining the value today of money lost in the past — and present value calcula - tions — the methodology for determining the value today of payments to be received in the future. Section A considers prejudgment interest calculations and explains what the interest rate in the calculations represents. Section B discusses discounting of future payments into present values and demonstrates how those general principles are applied in lawsuits by focusing on the determination of the relevant future stream of dollars and the selection of the proper discount rate. Section C considers two methodologies that courts apply in determining the value of life. Finally, Section D demonstrates how to value close corporations using two different approaches. A. Prejudgment Interest Prejudgment interest is interest accruing on the amount of a legal award from the time of the injury or damage to the time the judgment is entered by the court. It compensates a plaintiff for the loss of the use of funds and the effects of inflation after she suffered a cognizable economic harm caused by the defendant. Prejudgment interest is necessary to fully compensate plaintiffs because of the time value of money. If the plaintiff had never suffered economic damages, she could have instead invested that money and earned income or interest. Prejudgment interest is calculated as a small percentage tacked onto the principal award. For example, if only one year has elapsed between injury and judgment, the economic damages are $1,000,000 and the relevant interest rate is 4%, then the prejudgment 565 butler 3e 10 auto 7/24/14 11:05 AM Page 566 566 X · PRINCIPLES OF VALUATION interest would be $1,000,000 × .04 = $40,000. Thus, the plaintiff’s total award would be $1,040,000. What if four years elapsed between injury and judgment? Courts are split on whether they use simple or compound interest to compute prejudgment interest. Simple interest is interest paid on the original principal award only. Thus, if the prejudgment interest was $40,000 a year and four years elapsed between injury and judgment, the total prejudgment interest award would be $160,000, and the total damage award would be $1,160,000. Compound interest is interest earned not only on the original principal, but also on all interest amounts earned previously. If we assume that interest compounds once per year, then we can use a simple formula for future value calculations to compute the total damage award to the plaintiff: FV = P × (1+I) n where P = the principal award I = the relevant interest rate in the economy (assumed constant) n = the number of years elapsed FV = the future value or total damage award In our example, the plaintiff’s total award would be $1,169,859 ($1,000,000 × 1.04 4) As the amount of damages and length of time between injury and judgment increases, the amount of prejudgment interest increases. Similarly, slight changes in the interest rate can have significant impacts on the prejudgment interest award. If the interest rate in the above calculation had been 8% instead of 4%, the plaintiff’s award would have been $1,360,489 ($1,000,000 × 1.08 4), a difference of over $190,000! Yet despite the importance of prejudgment interest, there is no uniform method for determining it. Many jurisdictions have strict statutory or common law prescriptions on both when prejudgment interest is awarded and the interest rate used in the calculations. Other jurisdictions give courts discretion on whether to award it and how to calculate it. In these jurisdictions, courts have grappled with what the interest rate should represent. Should it reflect the interest that the plaintiff could have earned on her money, or the risk of the defendant’s default? Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc. United States Court of Appeals for the Seventh Circuit 874 F. 2d 431 (1989) POSNER, Circuit Judge. This protracted litigation over a franchise resulted in a resounding defeat for the franchisee and its principals — the Gorenstein brothers. Substantial and experienced busi - nessmen who own and operate several nursing homes in the Chicago area, they had obtained a franchise in 1978 from Quality Care-USA to provide home health care services in the Chicago area under Quality Care’s registered trademark. Home health care services involve the provision of nursing and other medical care in the home rather than in an institution. Licensed home health care providers can provide some services that unlicensed ones cannot; the parties disagree over whether Quality Care undertook as part of its deal with the Gorensteins to obtain a license for the franchised operation. butler 3e 10 auto 7/24/14 11:05 AM Page 567 X · PRINCIPLES OF VALUATION 567 Shortly after obtaining the franchise from Quality Care the Gorensteins defaulted on their royalty obligations, and in 1980 Quality Care terminated the Gorensteins’ franchise and demanded that they cease using the Quality Care trademark forthwith. Ignoring the demand, the Gorensteins instead sued Quality Care in an Illinois state court, seeking rescission of the franchise agreement. ... * * * Quality Care’s case then went to the jury, which found in its favor and awarded damages. The judge trebled the jury’s award of damages for trademark infringement, and also awarded Quality Care attorney’s fees on the entire judgment, plus prejudgment interest, at 9 percent per annum, on the award of trademark damages (untrebled), making a grand total that with postjudgment interest is now approaching $900,000. * * * There is no federal statutory interest rate on prejudgment interest. But as the 9 percent figure used by the district judge was well below the average interest rate for “securities” comparable in riskiness to Quality Care’s cause of action for trademark infringement against the Gorensteins, he can hardly be criticized for setting too high a rate. Surely the rate was too low; there were times while this suit was pending when the prime rate exceeded 20 percent. For the future, we suggest that district judges use the prime rate for fixing prejudgment interest where there is no statutory interest rate. That is a readily ascertainable figure which provides a reasonable although rough estimate of the interest rate necessary to compensate plaintiffs not only for the loss of the use of their money but also for the risk of default. The defendant who has violated the plaintiff’s rights is in effect a debtor of the plaintiff until the judgment is entered and paid or otherwise collected. At any time before actual payment or collection of the judgment the defendant may default and the plaintiff come up empty-handed. The plaintiff is an unsecured, uninsured creditor, and the risk of default must be considered in deciding what a compensatory rate of interest would be. A federal statute, 28 U.S.C. Sec. 1961, fixes the post judgment interest rate for federal cases (including diversity cases) as the rate on 52-week Treasury bills at the last auction of those bills before the judgment was entered. This rate is too low, because there is no default risk with Treasury bills. Of course the courts are bound by that rate so far as post - judgment interest is concerned. But prejudgment interest is governed by federal common law, and the courts are free to adopt a more discriminating approach. We have chosen the prime rate for convenience; a more precise estimate would be the interest rate paid by the defendant for unsecured loans. We do not want to straitjacket the district judges but we do want to caution them against the danger of setting prejudgment interest rates too low by neglecting the risk, often nontrivial, of default. * * * Notes and Questions 1. Posner and Interest Rates: Why does Posner believe the interest rate paid by the defendant for unsecured loans is the precise rate to use? Consider our discussion of risk and market prices in Chapter VI. 2. Back-Door Prejudgment Interest: Suppose a plaintiff had to take out a loan as a result of suffering economic harm caused by the defendant. If the court awards the interest paid on the loan as part of the plaintiff’s damage award, is that different from an award of prejudgment interest? Consider the following opinion: butler 3e 10 auto 7/24/14 11:05 AM Page 568 568 X · PRINCIPLES OF VALUATION United Telecommunications, Inc. v. American Television and Communications Corp. United States Court of Appeals for the Tenth Circuit 536 F.2d 1310 (1976) William E. Doyle, Circuit Judge. Involved here is the exchange of an interest in Jefferson-Carolina Corp., a cable television company, by United Telecommunications, Inc. (“United”) for 175,000 shares of American Television & Communications Corp. (“ATC”). ... The purchase agreement between United and ATC .
Load more

Recommended publications
  • Lessons from Burkina Faso's Thomas Sankara By
    Pan-Africanism and African Renaissance in Contemporary Africa: Lessons from Burkina Faso’s Thomas Sankara By: Moorosi Leshoele (45775389) Submitted in accordance with the requirements for the degree of Doctor of Philosophy At the UNIVERSITY OF SOUTH AFRICA SUPERVISOR: Prof Vusi Gumede (September 2019) DECLARATION (Signed) i | P a g e DEDICATION I dedicate this thesis to Thomas Noel Isadore Sankara himself, one of the most underrated leaders in Africa and the world at large, who undoubtedly stands shoulder to shoulder with ANY leader in the world, and tall amongst all of the highly revered and celebrated revolutionaries in modern history. I also dedicate this to Mariam Sankara, Thomas Sankara’s wife, for not giving up on the long and hard fight of ensuring that justice is served for Sankara’s death, and that those who were responsible, directly or indirectly, are brought to book. I also would like to tremendously thank and dedicate this thesis to Blandine Sankara and Valintin Sankara for affording me the time to talk to them at Sankara’s modest house in Ouagadougou, and for sharing those heart-warming and painful memories of Sankara with me. For that, I say, Merci boucop. Lastly, I dedicate this to my late father, ntate Pule Leshoele and my mother, Mme Malimpho Leshoele, for their enduring sacrifices for us, their children. ii | P a g e AKNOWLEDGEMENTS To begin with, my sincere gratitude goes to my Supervisor, Professor Vusi Gumede, for cunningly nudging me to enrol for doctoral studies at the time when the thought was not even in my radar.
    [Show full text]
  • Energy Efficiency Guidelines for Office Buildings in Tropical Climate Design Tools for a Low Energy Demand: Cost Aspects 2 Outline
    Energy Efficiency Guidelines for Office Buildings in Tropical Climate Design Tools for a Low Energy Demand: Cost aspects 2 Outline A. Life Cycle Cost analysis – What is LCC? – Comparison of LCC and other methods – Limitations of LCC B. Excel based tool for LCC analysis • Energy Payback Period (EPP). For example, a measure with an ini>al investment of $4,000 and an expected annual savings of $1,000 has an EPP of 4 years. • It does not account for the time value of money: the fact that the value of money does not remain constant all the time (i.e. $1,000 in the present are worth more than the same amount in the future); • It is not a measure of long-term economic performance because it only focuses on how quickly the initial investment can be recovered, ignoring all the costs and savings incurred after the point in time in which payback is reached; • It does not account for the opportunity cost; this is, that this money could had been invested in something else in exchange of a potentially higher return; • Life Cycle Cost – 3 indicators of economic performance: • Net Present Value (NPV) • Intenral Return Rate (IRR) • Savings to Investement ratio (SIR) • Net Present Value (NPV) For example, imagine that the country is experiencing an annual increase in its level of prices of 3%. This rate of inflaon is diminishing the future value of money as compared to their present value. At this 3% rate the present value (discounted value) of these $1,000 a year for the next four years is: $1,000/(1 + 3%) +$1,000/(1+3%)2 + $1,000/(1+3%)3 +$1,000/(1+3%)4 This is: $971 + $943 + $915 + $888 = $3,717 As it can be observed, the more far away in the future, the lower the present value of those $1,000.
    [Show full text]
  • The Only Spending Rule Article You Will Ever Need M
    Financial Analysts Journal Volume 71 · Number 1 ©2015 CFA Institute The Only Spending Rule Article You Will Ever Need M. Barton Waring and Laurence B. Siegel After examining an array of approaches to determining a spending rule for retirees, the authors propose the annually recalculated virtual annuity. Each year, one should spend (at most) the amount that a freshly pur- chased annuity—with a purchase price equal to the then-current portfolio value and priced at current interest rates and number of years of required cash flows remaining—would pay out in that year. Investors who behave in this way will experience consumption that fluctuates with asset values, but they can never run out of money. ow much of your capital Calculating a Spending can you afford to spend Rate: An Annuitization Heach year? A great deal of effort has been expended on Problem CFA INSTITUTE determining how to construct FINANCIAL ANALYSTS JOURNAL In this article, we tie back to long- an efficient investment portfolio, standing and widely accepted how much risk to take, and how GRAHAM research asserting that the pur- to accomplish many other valu- and pose of investment policy for the able tasks on the accumulation individual is to support consump- side of the investment equation. DODD tion by providing an annuity of AWARDS OF EXCELLENCE But a body of useful thinking on payments in some form for one’s the decumulation or spending remaining life. Our insight is that side, in language accessible to constructing a spending rule is the investor, is just beginning to Top Award itself an annuitization problem at emerge.
    [Show full text]
  • The Time Value of Money
    THE TIME VALUE OF MONEY Aswath Damodaran Intui<on Behind Present Value ¨ There are three reasons why a dollar tomorrow is worth less than a dollar today ¤ Individuals prefer present consump<on to future consump<on. To induce people to Give up present consump<on you have to offer them more in the future. ¤ When there is monetary inflaon, the value of currency decreases over <me. The Greater the inflaon, the Greater the difference in value between a dollar today and a dollar tomorrow. ¤ If there is any uncertainty (risk) associated with the cash flow in the future, the less that cash flow will be valued. ¨ Other thinGs remaininG equal, the value of cash flows in future <me periods will decrease as ¤ the preference for current consump<on increases. ¤ expected inflaon increases. ¤ the uncertainty in the cash flow increases. 2 Discoun<nG and CompoundinG ¨ The mechanism for factorinG in these elements is the discount rate. The discount rate is a rate at which present and future cash flows are traded off. It incorporates (1) Preference for current consump<on (Greater ....HiGher Discount Rate) (2) Expected inflaon(HiGher inflaon .... HiGher Discount Rate) (3) Uncertainty in the future cash flows (HiGher Risk....HiGher Discount Rate) ¨ A hiGher discount rate will lead to a lower value for cash flows in the future. ¨ The discount rate is also an opportunity cost, since it captures the returns that an individual would have made on the next best opportunity. • Discoun<nG future cash flows converts them into cash flows in present value dollars. Just a discoun<nG converts future cash flows into present cash flows, • CompoundinG converts present cash flows into future cash flows.
    [Show full text]
  • Energy Efficiency Guidelines for Office Buildings in Tropical Climates
    Energy Efficiency Guidelines for Office Buildings in Tropical Climates Energy Efficiency Guidelines for Office Buildings in Tropical Climates Prepared by: Funded by the: Executed by the: European Union Disclaimer The Energy Eciency Guidelines for Oce Buildings in Tropical Climates was prepared by the Depart- ment of Sustainable Development of the General Secretariat of the Organization of American States through the consulting services of Trama Tecnoambiental in partnership with the Tropical Architecture Institute (ITA) in Costa Rica; CREVER-Universitat Rovira i Virgili and other independent consultants. This publication was created as a material component of the Caribbean Sustainable Energy Program (CSEP), which is an initiative funded by the European Union. The views expressed herein are presented for informational purposes only and do not represent the opinions or ocial positions of the European Union, the Organization of American States, its General Secretariat, or any of its member states. The European Union and the Organization of American States, its General Secretariat, and member states do not guarantee the accuracy of the data included in this publication and accept no responsibi- lity whatsoever for any liability arising from its use. The European Union and the Organization of Ameri- can States, its General Secretariat, and member states also disclaim responsibility for errors, omissions, inaccuracies, or similar characteristics as well as any loss or damage arising from the use and/or appli- cation of the contents of this publication. Copyright Notice © 2013 General Secretariat of the Organization of American States (OAS). Published by the Department of Sustainable Development. All rights reserved under International and Pan-American Conventions.
    [Show full text]
  • Time Value of Money
    Time Value of Money Topics to be covered 1. Future Value - Simple Interest - Compound Interest - Effective Interest Rate (EAR) - Annual Percentage Rate (APR) 2. Present Value 3. Calculating future/present value if interest is not compounded annually. 4. Present and Future Values of Multiple Cash Flows 5. Perpetuity: Indefinite Cash Flow 6. Annuity: Equal Cash Flow Ordinary Annuity Annuity Due 7. Mortgage Payment 8. Interest Rate Nominal Interest Real Interest I Future Value: Amount to which an investment will grow after earning interest. 1.1 Simple Interest: Interest is earned only on the original investment; no interest is earned on interest. 1.2 Compound Interest: Interest is earned on interest. Example1: How much your money will grow if you deposit $100 which earned 6% simple interest for 4 years? How much if it is compound interest? a) Simple Interest T=0 T=4 PV=$100 FV=? 0 1 2 3 4 Interest Earned 100*6% =6 100*6% =6 100*6% =6 100*6% =6 Value 100 106 112 118 124 Simple Interest = P * R * T b) Compound Interest 0 1 2 3 4 Interest Earned 100*6% 106*6% 112.36*6% 119.10*6% =6 =6.36 =6.74 =7.14 Value 100 106 112.36 119.10 126.24 Compound Interest = (1+r)t 1 Interest earned on Interest = Compound Interest – Simple Interest Future Value = PV * (1+r)t Example 2: What is the future value of $100 if interest is compounded annually at a rate of 6% for 4 years? 1) FV = 100 *(1+0.06)4 = 126.24 2) 100 PV 6 %I 4 N Cpt FV 126.24 3) Table FV = 100 *(1.262) = 126.24 Example 2B: Sale of Manhattan Island for $24 in 1626 (N=385) N = 385 I = 8% PV = $24 * (1+.08) ^385 = 177,156,500,000,000 = 164 trillion With R = 3.5 % PV = 13,559,570 Effective Annual Interest Rate (EAR) VS Annual Percentage Rate (APR) 1.3 EAR: Interest rate that is annualized using compound interest.
    [Show full text]
  • Time Value of Money Professor James P. Dow, Jr
    Notes: FIN 303 Fall 15, Part 4 - Time Value of Money Professor James P. Dow, Jr. Part 4 – Time Value of Money One of the primary roles of financial analysis is to determine the monetary value of an asset. In part, this value is determined by the income generated over the lifetime of the asset. This can make it difficult to compare the values of different assets since the monies might be paid at different times. Let’s start with a simple case. Would you rather have an asset that paid you $1,000 today, or one that paid you $1,000 a year from now? It turns out that money paid today is better than money paid in the future (we will see why in a moment). This idea is called the time value of money. The time value of money is at the center of a wide variety of financial calculations, particularly those involving value. What if you had the choice of $1,000 today or $1,100 a year from now? The second option pays you more (which is good) but it pays you in the future (which is bad). So, on net, is the second better or worse? In this section we will see how companies and investors make that comparison. Discounted Cash Flow Analysis Discounted cash flow analysis refers to making financial calculations and decisions by looking at the cash flow from an activity, while treating money in the future as being less valuable than money paid now. In essence, discounted cash flow analysis applies the principle of the time value of money to financial problems.
    [Show full text]
  • Basic Concepts in Forest Valuation and Investment Analysis
    Stephen F. Austin State University SFA ScholarWorks Faculty Publications Forestry 1993 Basic Concepts in Forest Valuation and Investment Analysis Steven H. Bullard Stephen F. Austin State University, Arthur Temple College of Forestry and Agriculture, [email protected] Thomas J. Straka Follow this and additional works at: https://scholarworks.sfasu.edu/forestry Part of the Finance and Financial Management Commons, and the Forest Sciences Commons Tell us how this article helped you. Recommended Citation The current edition 3.0 can be found at the following location: Bullard, Steven H. and Straka, Thomas J., "Basic Concepts in Forest Valuation and Investment Analysis" (2011). eBooks. http://scholarworks.sfasu.edu/ebooks/21 This Professional Document is brought to you for free and open access by the Forestry at SFA ScholarWorks. It has been accepted for inclusion in Faculty Publications by an authorized administrator of SFA ScholarWorks. For more information, please contact [email protected]. Basic Concepts in Forest Valuation and Investment Analysis Edition 1.0.2 I~ by Steven H. Bullard Department of Forestry Mississippi State University and Thomas J. Straka Department of Forest Resources Clemson University Copyright© 1993 Edition 1.0 Bullard-Straka Distributed by GTR Printing. Edition 1.0 .2 may be ordered through GTR Printing, P.O. Box 2227, Starkville, MS 39759 Preface Purpose. This book was originally intended to supplement lectures in forestry economics at the undergraduate level. At Mississippi State University, for example, these materials are currently used in one of the eleven major topics included in a one-semester course titled 'Forest Resource Economics.' It is also intended, however, that the book will serve as a basic reference for foresters with experience in valuation concepts and terminology.
    [Show full text]
  • Solar Electric Investment Analysis Series
    SARE Technical Report Solar Electric Investment Analysis Series By Eric Romich and F. John Hay Available at: www.sare.org/research August 2019 Peer-reviewed evidence based findings and practical strategies for photovoltaic solar systems in agriculture SOLAR ELECTRIC INVESTMENT ANALYSIS Solar Electric Investment Analysis By: F. John Hay By: Eric Romich and F. John Hay Adapted from Solar Electric Investment Analysis ©2016 B-1291.1 by Milton Geiger, Eric Romich, and Benjamin S. Rashford made available under a Creative Commons Attribution Non-Commercial 4.0 license (international) Solar Electtric Investment Analysis is a peer-reviewed publication. Original available at: www.wyoextension.org/publications/pubs/b1291.1.pdf Suggested acknowledgment: Geiger, Milton; Eric Romich, Benjamin S. Rashford. Solar Electric Investment Analysis. Part 1: Estimating System Production. B-1291.1. 2016. Permission is granted to share, copy, and redistribute the material in any medium or format and adapt, remix, transform, and build upon the material for any purpose other than commercial, under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner but not in any way that suggests the licensor endorses you or your use. Editor: Steven L. Miller, senior editor, College of Agriculture and Natural Resources, Ofce of Communications and Technology. Graphic Designer: Tana Stith, College of Agriculture and Natural Resources, Ofce of Communications and Technology. Extension is a Division of the Institute of Agriculture and Natural Resources at the University of Nebraska–Lincoln cooperating with the Counties and the United States Department of Agriculture.
    [Show full text]
  • FORM 10-K Ball Corporation
    UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2008 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number 1-7349 Ball Corporation State of Indiana 35-0160610 10 Longs Peak Drive, P.O. Box 5000 Broomfield, Colorado 80021-2510 Registrant’s telephone number, including area code: (303) 469-3131 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered Common Stock, without par value New York Stock Exchange Chicago Stock Exchange Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES [X] NO [ ] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES [ ] NO [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
    [Show full text]
  • 2. Time Value of Money
    2. TIME VALUE OF MONEY Objectives: After reading this chapter, you should be able to 1. Understand the concepts of time value of money, compounding, and discounting. 2. Calculate the present value and future value of various cash flows using proper mathematical formulas. 2.1 Single-Payment Problems If we have the option of receiving $100 today, or $100 a year from now, we will choose to get the money now. There are several reasons for our choice to get the money immediately. First, we can use the money and spend it on basic human needs such as food and shelter. If we already have enough money to survive, then we can use the $100 to buy clothes, books, or transportation. Second, we can invest the money that we receive today, and make it grow. The returns from investing in the stock market have been remarkable for the past several years. If we do not want to risk the money in stocks, we may buy riskless Treasury securities. Third, there is a threat of inflation. For the last several years, the rate of inflation has averaged around 3% per year. Although the rate of inflation has been quite low, there is a good possibility that a car selling for $15,000 today may cost $16,000 next year. Thus, the $100 we receive a year from now may not buy the same amount of goods and services that $100 can buy today. We can avoid this erosion of the purchasing power of the dollar due to inflation if we can receive the money today and spend it.
    [Show full text]
  • Annual Report 2013
    OHIO DEPARTMENT OF COMMERCE Fiscal Year 2013 ANNUAL REPORT John R. Kasich, Governor Andre T. Porter, Director www.com.ohio.gov I am pleased to present the Fiscal Year 2013 Annual Report of the Ohio Department of Commerce with its many examples of exceptional customer service and a job- friendly environment in the great state of Ohio. This report highlights the work of the Department of Commerce. Through our fi nancial and safety-oriented focuses, we’ve seen strong indications that the state is continuing improvement. Our mission is to provide exceptional customer service so businesses can operate lawfully and succeed as jobs-creators. We do all of this while safeguarding Ohioans. Under the continued direction of Governor John R. Kasich, the “Rainy Day Fund” is now at nearly $1.5 billion, with $1B being deposited into the fund this year. The Department of Commerce continues to take a Common Sense approach to regulation and reducing costs while striving to even higher standards of productivity and customer satisfaction. Lieutenant Governor Mary Taylor’s Common Sense Initiative (CSI) provides both direction and assistance to Commerce in creating a job-friendly environment. As we work closely with the Initiative, we receive feedback from both regulated industries and the general public. Where regulations are outdated or don’t make sense, we clarify, simplify or work to eliminate them. As we look forward to Fiscal Year 2014 and beyond, the Ohio Department of Commerce remains committed to our efforts to make this great state a leader in the nation. Sincerely, Andre T. Porter Andre T.
    [Show full text]