ILLUSTRATION13.1:TheValueofChangingManagement:
SAP
SAP is a business software manufacturing company
headquarteredinGermany.Ithasawell-deservedreputation
for good management, especially when it comes to new
investments;itreinvested 57.42% ofits after-taxoperating
income back into thecompany and generateda return on
capital of 19.93% in 2004. On both dimensions, it did
considerablybetterthanitspeergroup.Themanagementis,
however,extremelyconservativewhenitcomestotheuseof
debtandhasadebtratioof14%;theresultingcostofcapital