Define: Value Driver

Business, Legal & Accounting Glossary

Definition: Value Driver

Quick Summary of Value Driver

Any variable that significantly affects the value of an organisation.

What is the dictionary definition of Value Driver?

Dictionary Definition

A value driver is any variable that significantly impacts the value of an organisation.

Alfred Rappaport identified seven key drivers of value in his development of shareholder value analysis.

These key drivers are:

  • Sales Growth Rate
  • Operating Profit Margin
  • Taxation Rate
  • Fixed Capital Investment
  • Working Capital Investment
  • Planning Period
  • Cost of Capital


Full Definition of Value Driver

Of the seven key drivers identified by Rappaport, the first 5 (sales growth rate, operating profit margin, tax rate, fixed capital investment, working capital investment) may be used to forecast the future cash flows of a business, whereas the planning period and cost of capital can be used to calculate the present value of these cash flows.

In practice, companies will have differing value drivers.

For example: Sony produces high-quality products for which consumers are prepared to pay a relatively high price.

Maintaining a high operating profit margin is therefore more critical to Sony that sales growth.

For another company, however, sales growth may actually be a more important factor.


Cite Term

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Page URL
Modern Language Association (MLA):
Value Driver. Payroll & Accounting Heaven Ltd. April 09, 2020
Chicago Manual of Style (CMS):
Value Driver. Payroll & Accounting Heaven Ltd. (accessed: April 09, 2020).
American Psychological Association (APA):
Value Driver. Retrieved April 09, 2020, from website:

Definition Sources

Definitions for Value Driver are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th May, 2019