Harvard Business Review

APRIL 16, 2015

Unless your company’s return on capital exceeds its cost of capital, no amount of revenue growth can create value. For the many firms whose cost of capital and return on capital are roughly equal, in fact, the only path to value creation is to increase return on capital.

CEO 8

CEO ROIC Cost of Capital Merton 8

Harvard Business Review

APRIL 9, 2015

Sure, you may know this already, but people who haven’t studied finance often find this statement confusing. Finance & Accounting Tool. You just add up all the costs of the investment. If you’re just buying a new machine, it’s pretty easy to estimate all the costs. Excerpted from. Joe Knight.

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

OCTOBER 10, 2017

One reason for the paltry performance is that while other business areas, like sales or finance, are considered to be core functions, innovation is often considered to be something that’s “nice to have” rather than essential. Another pervasive reason is that senior executives are trained as operators, not innovators.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

SEPTEMBER 8, 2014

The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. In my experience, most CEOs, CFOs, and other C-suite executives involved in strategy formulation know these finance basics. It may seem that sales has little impact on the fourth value-creation lever, the firm’s cost of capital.

Debt to Equity Ratio 10

Debt to Equity Ratio Cost of Capital Strategy Incentives 10