Harvard Business Review

JUNE 18, 2015

PE firms typically buy controlling shares of private or public firms, often funded by debt, with the hope of later taking them public or selling them to another company in order to turn a profit. But how do PE firms decide which companies to buy? We classify private equity as buyout or growth equity investments in mature companies.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Terry Starbucker

AUGUST 29, 2010

Home About Me About This Blog Starbucker’s Amazon Store TerryStarbucker.com Ramblings From a Glass Half Full How Passion Can Revolutionize Digital Technology, AND Change The World: A Video Every Leader Must See by Starbucker on August 29, 2010 In early 1997, its stock price was $4. That company is Apple. It was about passion.

Technology 282

Technology Price Video Cost of Capital 282

Harvard Business Review

APRIL 23, 2015

The basic principles are: If you want to earn above the cost of capital (if you want to create value), you must get a higher return on your efforts than the average competitor. Your prices must be higher or your costs, including the cost of your balance sheet and the cost of taxes, must be lower.

Strategy 8

Strategy Porter Price Cost of Capital 8

Harvard Business Review

FEBRUARY 1, 2018

based companies by anywhere from 10% to 20% , depending on their current tax position. At a recent investor conference, one of us heard a CEO proudly state that the new law would have no effect at all on how his company views investments. Why are CEOs so reluctant to pursue bold new investments in growing their companies?

Supply Chain 9

Supply Chain CEO Discount Retail 9

Harvard Business Review

SEPTEMBER 13, 2017

These ranges were wide due to the relative size of the different players in the supply chain (for example, a company that has higher revenues will realize greater benefits than a smaller firm). These values can be estimated credibly and cost-effectively, and we set about applying them to the Brazilian beef sector. of revenues).

Supply Chain 8

Supply Chain Net Present Value Retail Cost of Capital 8

Harvard Business Review

MAY 4, 2012

Investors reward companies (such as Apple and Kimberly-Clark ) whose current performance or guidance for the future exceeds market expectations, and they punish companies (as they did Starbucks and Procter & Gamble ) whose performance or guidance fails to meet expectations. First, let's review the case for guidance. FD) constraints.

CFO 11

CFO Metrics Price Depreciation 11

Harvard Business Review

APRIL 5, 2017

The McKinsey Global Institute, in conjunction with FCLT Global, recently released research stating that long-term-oriented companies perform better than those that focus on short-term results. While a laudable effort in principle, measuring a company’s tendency to make myopic operating and investing decisions is fiendishly complex.

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

OCTOBER 3, 2011

CEOs need to understand the principles of shareholder value and why they are so important in judging difficult trade-offs, learn about the relationship between the financial performance of the company and the company's stock, and communicate clearly and act appropriately when expectations gaps open. That is a profound misunderstanding.

Short-term 12

Short-term Long-term Price CEO 12

Harvard Business Review

NOVEMBER 4, 2014

The key argument for fossil fuel divestment is that the cost of carbon dioxide emissions and other pollutants are not being accurately priced by the market. For many companies, most of the capital expenditures are financed from internal cash flows and bank financing. In this case, divestment would clearly backfire.

Finance 8

Finance Cost of Capital Constraint Price 8

Harvard Business Review

NOVEMBER 4, 2014

The key argument for fossil fuel divestment is that the cost of carbon dioxide emissions and other pollutants are not being accurately priced by the market. For many companies, most of the capital expenditures are financed from internal cash flows and bank financing. In this case, divestment would clearly backfire.

Finance 8

Finance Cost of Capital Constraint Price 8

Harvard Business Review

JUNE 22, 2015

Marketers often have to make the call on whether a certain marketing investment is worth the cost. Can you justify the price tag of the ad you want to buy or the marketing campaign you’re hoping to launch next quarter? Revenue is the unit quantity sold multiplied by the selling price per unit. First, look at fixed costs.

Payback Period 8

Payback Period Fixed Costs Analysis Price 8

Harvard Business Review

JUNE 27, 2012

My colleagues and I at Bain & Company have been tracking this for forty years, and we have never seen companies losing their leadership positions as quickly as they are today. Did it seem "creative" to Nokia shareholders when the company missed the smart phone wave despite having some of the early technology?

Creativity 14

Creativity Long-term Kotter Cost of Capital 14

Harvard Business Review

MAY 14, 2013

Because of the economic slowdown, industrial activity has dropped more than 20% in certain sectors of the Continent''s economy, and most industrial companies are using much less energy than they were a few years ago. There''s no way to determine precisely how much effect the postponement would have had on carbon prices.

Price 8

Price Energy Politics Marketing 8

Harvard Business Review

OCTOBER 21, 2016

Yet executives are often reluctant to place sustainability core to their company’s business strategy in the mistaken belief that the costs outweigh the benefits. We exclude companies with a traditional CSR program that supports employee volunteering in the community – this does not by itself qualify as sustainability.

Supply Chain 8

Supply Chain Price Loyalty Efficiency 8

Harvard Business Review

MARCH 10, 2011

Many are deeply uncertain about which initiatives they should fund — and one root of this indecision is a general lack of confidence in the cost of capital projections they are using to make the call. We find that 55 percent of respondents are convinced their cost of capital estimates are off by more than 50 basis points.

Cost of Capital 13

Cost of Capital CAPM Cost Discounted Cash Flow 13

Harvard Business Review

OCTOBER 11, 2013

If you’d like your comment to be considered for publication, please be sure to include your full name, company or university affiliation, and e-mail address.). Terranola is the company behind those granola bar machines you see on every kitchen counter nowadays. The Power of the Power Bar. Terranola’s market cap skyrocketed to $8.1

Case Study 8

Case Study CFO Hedge PR 8

Harvard Business Review

FEBRUARY 7, 2011

Take, for instance, a group of companies that currently have high returns on invested capital (ROIC). If you follow that group over time, you would see their ROICs revert back toward the cost of capital. Consider the 1990s, when stock prices soared to lofty levels. Hiring stars.

Skills 15

Skills ROIC Sports Cost of Capital 15

Harvard Business Review

MAY 24, 2017

Today’s executives spend a lot of time managing the balance sheet, despite the fact that it doesn’t represent their company’s scarcest resource. Financial capital is relatively abundant and cheap. According to Bain’s Macro Trends Group, the global supply of capital stands at nearly 10 times global GDP.

Human Capital 15

Human Capital Management Company ROCE 15

Harvard Business Review

SEPTEMBER 8, 2014

The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. Smartly reducing assets devoted to activities that earn less than their cost of capital requires good links with evolving market realities. ( Isn’t that a function of risk parameters and the debt-to-equity ratio?

Debt to Equity Ratio 10

Debt to Equity Ratio Cost of Capital Strategy Incentives 10

Harvard Business Review

NOVEMBER 7, 2012

There is a fascinating relationship between executives and the stock prices of the companies they manage. On the other hand, they frequently find their stock price inscrutable. The vast majority of executives think that their price is too low, but few can articulate an analytical case that backs that intuition.

Price 8

Price Analysis Cost of Capital Disruptive Innovation 8

Harvard Business Review

FEBRUARY 7, 2017

Companies deliver superior results when executives manage for long-term value creation and resist pressure from analysts and investors to focus excessively on meeting Wall Street’s quarterly earnings expectations. We’ve seen companies such as Unilever, AT&T, and Amazon succeed by sticking resolutely to a long-term view.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

APRIL 2, 2014

The prizes were awarded “for their empirical analysis of asset prices,” but what the three had been doing looked from the outside less like a common endeavor than a not-all-that-coherent argument. So I wanted to see if Campbell could make sense of the prizes and the current state of academic knowledge about asset prices.

CAPM 8

CAPM Discount Price Finance 8

Strategy Driven

SEPTEMBER 9, 2011

The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital. Companies have long struggled to generate sustained profitable growth – and few have succeeded. ’ The companies exist to exploit existing businesses, not to create new ones.

Innovation 50

Innovation NPV Business Model Constraint 50