Harvard Business Review

APRIL 5, 2017

However, higher accruals can reflect either innocuous aspects of certain business models, such as in the construction industry, where the time lag between earning income and realizing cash is long, or that growing firms retain higher working capital to meet greater current and future customer demand. What would better measures be?

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

AUGUST 27, 2015

Companies in the top one-fifth of profitability earn, in aggregate, about 70 times more economic profit (accounting profit less cost of capital) than those in the middle three-fifths combined, according to McKinsey’s database of 3,000 large, publicly listed, nonfinancial U.S. Consider what’s happening among corporations.

ROIC 8

ROIC McKinsey GDP Company 8

Harvard Business Review

MAY 25, 2018

Likewise, the airlines have demonstrated that well-constructed alliances can be a powerful way to build market position and capitalize on scale. Today’s low cost of capital creates a powerful financial incentive to put money to work by investing in a portfolio of ideas and capabilities.

Incubator 8

Incubator Insurance Cost of Capital Competitive Advantage 8

Harvard Business Review

FEBRUARY 7, 2017

To construct our Corporate Horizon Index, we identified five financial indicators, selected because they matched up with five hypotheses we had developed about the ways in which long- and short-term companies might differ. In this case its capital charge is $800 times 8%, or $64.

Long-term 8

Long-term EPS Short-term Management 8