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The Evolving Finance

Function:

Judy C. Lewent at Merck & Co., Inc.

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Introduction

In 1!

"ale# $ .% illion

'et inco(e $ ).! *illion

"ince 1+ $ #ale# growth $ 1- /a

Market ca/ital $ *illion 01+2 to !

*illion 0132

4/erated 31 /roduction 5acilitie# in 61countrie# with 11,6 e(/loyee#

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Tran#ition

Finance personnel would become involved earlier and

more directly in many business decisions, contributing

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Merck7# Finance Function

Focu#ed 5unctional knowledge Accounting, cash management, tax etc

road knowledge *a#e in #everal additionaldi#ci/line#

Applied economics, fnance, applied statistics 8nalytical #kill#

Monte corlo simulation, option pricing Managerial #kill#

Mercks strategy, value creating decisions

Co((unication# #kill# Client relationships

Learning ca/a*ility Update knowledge in analysis skills

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Finance deci#ion# Control

udget

Tra9c co/

u#ine## deci#ion# Client relation#hi/

Eective deci#ion at *u#ine## level

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Financial Evaluation & 8naly#i#0FE&82 Created in 1+

eport to CF! "ot to controller, treasurer

Inve#t(ent# in ;e#earch, Manu5acturing etc

8nalytical #kill# 8dvi#ory re#/on#i*ility 8nalytical tool# Client# 'ot li(ited to CE4, oard etc

Mid level e

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what deci#ion, what

analy#i#

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Financial Evaluation & 8naly#i#0FE&82 Credi*ility

>uality o5 analy#i#

=ocu(entation o5 their value

?alue addition i# dierence =eci#ion on *a#i# o5 analy#i#

=o it in the old way

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Lewent Career @ 8cAui#ition and Ca/italanaly#i#

Financial check on valuation analy#i# invariou# divi#ion#

Co#t o5 ca/ital at Merck#

Ca/ital inve#t(ent deci#ion#

Bead o5 licen#ing *eco(e# a regular

client

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Lewent Career @ 8##i#tant controller

nancial evaluation and control o5M"=;L

=evelo/(ent o5 original, inter/retive

nancial (odel# 5or ;&= /roDect# ;&= /roDect# 5aced relatively little

econo(ic or nancial #crutiny

Co(/le

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Lewent Career @ 8##i#tant controller

To/ /riority Ca/a*ility to a##e# ri#k and return

8*ility to a##e## contri*ution o5 ;&= to r( value

In/ut#Mote carlo #i(ulationCa/ital e

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E

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Tran#5era*ility

Can thi# #kill# or tool# develo/ed inMerck tran#5era*le

"ucce## /ath Understanding the $uestionnaires business %orked with them

&esigned a tool #or analysis

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Financial rogra((ing and4rganiHational 8da/ta*ility

Introduction o5 innovative and newa//roache#

8da/ta*ility o5 the new /roce##e#

"hort ter( *enet# ;e#earch /lanning (odel

early /redection# o5 Merck# 5uture (arket

ca/italiHation Long run horiHon *enet#

;&= eventually *oo#t *y 5actor 1

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Thank ou