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A Refresher on Cost of Capital

Harvard Business Review

You’ll likely be asked to show that the return on the investment will be better than your company’s cost of capital. What is the cost of capital? “The cost of capital is simply the return expected by those who provide capital for the business,” says Knight. Further Reading.

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A Refresher on Marketing ROI

Harvard Business Review

Companies spend a lot on marketing communications. And more fundamentally, does marketing actually work? Marketing ROI analysis can help answer those questions. What is Marketing ROI, and How Do Companies Use It? MROI helps prove that “marketing does indeed have an impact on the profitability of the firm.”

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CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

” A quarter century later, not much seems to have changed: fewer than five out of the 100 CEOs on HBR’s 2014 list of best-performing CEOs even mention “return on capital” on their official biography — and none of those five lead companies listed in the Dow Jones Industrial Average (DJIA) or in the EuroStoxx50.

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An HBR Refresher on Breakeven Quantity

Harvard Business Review

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? The variable costs to make each pair of flip flops are $14.00. How do you calculate it?

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How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years. of the world market, and the second-largest beef producer and consumer. of revenues) and $13 million to $62 million (0.01% to 0.7% of revenues).

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How Banks Can Compete Against an Army of Fintech Startups

Harvard Business Review

The marketing, underwriting, and servicing of SME loans have largely taken a backseat. Recent analysis by Bain and SAP found that only 7% of bank credit products could be handled digitally from end to end. .” And our analysis suggests there are strategies that they can use to compete successfully online.

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

We also know that private equity funds have outperformed public equity markets over the last three decades , even after the fees they charge are accounted for. Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital.

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