Outsized market performance yields plenty of benefits for publicly traded companies. It typically leads to higher incentive compensation and signals investor confidence in management. For the treasury function, it may also help them fund operations on advantageous terms or issue stock at favorable prices.

A higher market capitalization reduces a company's debt-to-equity ratio, which increases the likelihood of achieving an investment-grade credit rating (see Figure 1). Higher share prices can also serve as a useful currency to fund strategic mergers and acquisitions (M&A), since companies can either exchange stock or issue shares for cash to fund a transaction.

So, understanding how businesses drive market value is crucial not just for the C-suite at large, but for treasury and finance professionals especially. Research published by Fortuna Advisors offers insights into some characteristics that help companies produce exceptional market returns.