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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. To learn more about this commonly used business term, I spoke with Joe Knight, author of the HBR TOOLS: Return on Investment and co-founder and owner of www.business-literacy.com. Further Reading.

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The Complexity of Business Communication

CoachStation

Compare Michael Porter’s competitive advantage definition: “Competitive advantage, sustainable or not, exists when a company makes economic rents, that is, their earnings exceed their costs (including cost of capital).” Is change communication in your organisation more like the first example or the second?

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Should Companies Retain "Strategic" Cash?

Harvard Business Review

This raises the question of whether retaining strategic cash makes economic sense and should be viewed as a legitimate corporate finance tool in today's environment. Arguments for Strategic Cash. Often citing the maxim that "cash is king", CFOs know that strategic cash can enhance shareholder value in various ways.

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A Refresher on Marketing ROI

Harvard Business Review

I talked with Jill Avery, a senior lecturer at Harvard Business School and coauthor of HBR’s Go To Market Tools , about this concept and what it tells leaders about their spending on marketing. And more fundamentally, does marketing actually work? Marketing ROI analysis can help answer those questions.

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How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

Our research has found that embedded sustainability drives financial performance through mediating factors such as innovation, operational efficiency, risk reduction, employee recruitment, engagement and retention, customer and supplier loyalty, competitive advantage, reduced cost of capital, and improved marketing and sales.

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The Most Common Mistake People Make In Calculating ROI

Harvard Business Review

HBR TOOLS: Return on Investment. Finance & Accounting Tool. The finance people determine hurdle rates by looking at the company’s cost of capital, at the risk involved in a given project, and at the opportunity cost of forgoing other investments. Excerpted from. Joe Knight. Add to Cart.

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4 Ways Leaders Can Get More from Their Company’s Innovation Efforts

Harvard Business Review

For any business to succeed over the long term, it must earn a return that exceeds its cost of capital. It is through continuously making incremental progress in lowering costs and increasing revenues that firms achieve competitive advantage in their industry. Here are four things leaders can do.