In THE VALUE EQUATION, Christopher Volk, Who Led Three Publicly-Traded Companies, Focuses on the Mechanics That Drive Wealth Creation
With over thirty years of experience leading three successful publicly traded companies and even more time providing capital to thousands of businesses throughout the United States, Christopher H. Volk has an unparalleled perspective on what it takes to create a successful enterprise. In THE VALUE EQUATION (Wiley, May 2022), Volk shows how companies are conceived and work to generate personal and collective wealth.
“Given all the books written about how to get rich, I am unaware of any that focus on the financial mechanics that drive business wealth. Yet most of the world’s greatest fortunes, as well as many smaller fortunes, are centered in business model fundamentals,” he explains.
At the heart of THE VALUE EQUATION is Volk’s formula, devised and used over his career, that reduces business model fundamentals to just Six Variables. The variables include Sales; Business Investment; Operating Profit Margin; Amount of Interest-Costing Proceeds (Other People’s Money); Cost of Other Peoples’ Money; and Annual Maintenance Capital Expense. Volk’s Six Variables combine to compute investor returns, which rest at the center of business wealth production by making companies worth more than they cost to create. As he notes, “in business, it is excess returns, not asset appreciation, that generate value from thin air.”
While these six financial variables collectively comprise corporate business models, there are an infinite number of operational alternatives that stand behind the numbers and the resultant equity returns. “Business models do not execute themselves,” Volk writes. “Human effort drives business model creation and execution. It is the essential ingredient.”
Throughout THE VALUE EQUATION, Volk explores the many ways that leaders impact how their companies are built, organized, and valued using examples ranging from smaller companies like Scrub Daddy to giants including Facebook, Apple, Amazon, Netflix and Google. He also provides stories and business-model lessons learned from the three companies he led and took public.
THE VALUE EQUATION delivers a unique universal and simple approach to understanding business, with the goal of encouraging readers to embrace business and business investment opportunities. In this process, Volk notes that companies can be started with little in the way of personal investment. “Good ideas, solid business models, and qualified leadership teams are scarcer than the investor capital needed to support and sponsor them. In my career, this has become increasingly true,” says Volk.
Whether readers are interested in starting or leading a business, becoming better investors, growing their careers or personal wealth opportunities, THE VALUE EQUATION is filled with information that cannot be found elsewhere. In addition, supplemental materials including interactive Excel spreadsheets, illustrations, and sample corporate financial models are available on the author’s companion website atwww.thevalueequation.com.
About the Author
Christopher Volk, author of THE VALUE EQUATION, has been instrumental in leading and publicly listing three successful companies, two of which he co-founded. The most recent of these is STORE Capital (NYSE: “STOR”) where he served as founding chief executive officer, and then as executive chairman. Volk began writing about corporate finance early in his career, devising the Value Equation concept, which garnered an award upon its 1999 introduction. He eventually created an award-winning video series on the topic while at STORE Capital. A 2019 regional winner of EYs’ Entrepreneur of the Year award, Volk is a frequent university lecturer and serves on multiple non-profit boards. He resides in Paradise Valley, Arizona, and Huntsville, Alabama.
