Applying financial portfolio analysis to government program portfolios [electronic resource] /

by Botkin, Bradford L.; School (U.S.), Naval Postgraduate

Abstract (Summary)
Government agencies and the Department of Defense in particular, require decision-support tools when making funding decisions regarding portfolios of programs or projects. Government agencies have had some success in applying Project Portfolio Management (PPM) when choosing among potential programs; however, once programs are underway, financial managers routinely face funding optimization decisions similar to those of private-sector stock market portfolio managers. While private-sector portfolio managers rely on "stock-price" based financial portfolio analysis to aid decision making, government financial managers lack an equivalent "stock-price" metric for program or project performance. This research suggests the government's Earned Value Management System (EVMS) metrics may be used to generate a suitable proxy with which financial portfolio analysis can be conducted. From this analysis, risk and return trade-offs can be quantified and used when making portfolio decisions. An example using representative EVM data is presented. Recommendations on the possible applicability and limitations of the technique are discussed.
Bibliographical Information:


School:The United States Naval Postgraduate School

School Location:USA - California

Source Type:Master's Thesis



Date of Publication:

© 2009 All Rights Reserved.