Strategy Driven

SEPTEMBER 9, 2011

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. 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. How do they do it?

Innovation 50

Innovation NPV Business Model Constraint 50

Harvard Business Review

SEPTEMBER 13, 2017

We found that sustainable and deforestation-free practices created significant financial benefits for all players in the industry’s value chain. 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.

Supply Chain 8

Supply Chain Net Present Value Retail Cost of Capital 8

Harvard Business Review

APRIL 9, 2015

But before anyone writes a check, you need to calculate the return on investment (ROI) by comparing the expected benefits with the costs. Analyzing ROI isn’t always as simple as it sounds and there’s one mistake that many managers make: confusing cash and profit. Financial analysis Project management'

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

AUGUST 21, 2015

Setting the right price for your product or service is hard. Most customers in most markets are sensitive to the price of a product or service, and the assumption is that more people will buy the product or service if it’s cheaper and less will buy it if it’s more expensive.

Price 8

Price Debt to Equity Ratio Marketing Metrics 8

Harvard Business Review

JUNE 22, 2015

“It’s one of the more popular ways that managers calculate marketing ROI,” says Avery, pointing out that other common ones include calculating the investment payback period, calculating an internal rate of return, and using net present value analysis. How do you calculate it? BEQ = 200 units.

Payback Period 8

Payback Period Fixed Costs Analysis Price 8

Harvard Business Review

NOVEMBER 25, 2013

CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment. Marketing KPIs that don’t directly address shareholder value and the company’s objectives don’t tell the CMO or the CFO where marketing efforts are having the most impact.

CFO 8

CFO Short-term Long-term Benchmarking 8