Harvard Business Review

MARCH 31, 2017

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. “The decision-makers will want to see a simple model that shows revenue, costs, overhead, and cash flow,” he says. The Refresher: Net Present Value. Related Video.

Finance 8

Finance Skills EBITDA Net Present Value 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. You just add up all the costs of the investment.

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

FEBRUARY 24, 2011

Imagine if managements, boards, and investors adopted them: we could restart our economy, energize our business school curricula and create prosperity for our children and grandchildren. But why compare apples (book value) to oranges (share price and dividends)? In all but seven of these 45 years, Berkshire beat the S&P.

Letter 15

Letter P&L Net Present Value Insurance 15

Harvard Business Review

JUNE 22, 2015

Marketers often have to make the call on whether a certain marketing investment is worth the cost. If the company doesn’t sell the equivalent of the BEQ as a result of the investment, then it’s losing money and it won’t recoup its costs. How do you calculate it?

Payback Period 8

Payback Period Fixed Costs Analysis Price 8

Harvard Business Review

NOVEMBER 25, 2013

Only when they began to really analyze their marketing costs did the company realize that it was spending three times the industry benchmark on coupons and 50 percent more on research. CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment.

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

JUNE 18, 2015

What have been less explored are the specific actions taken by private equity (PE) fund managers. In a survey of 79 PE firms managing more than $750 billion in capital, we provide granular information on PE managers’ practices and how firms’ strategies relate to the characteristics of their founders.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

SEPTEMBER 27, 2012

Managers in these organizations translate corporate objectives into a few straightforward guidelines that help employees make on-the-spot decisions and adapt to constantly shifting environments, while keeping the big picture in mind. Its new management team took over an organization that was bureaucratic, overstaffed, and bleeding cash.

Strategy 8

Strategy Proposal Guidelines Net Present Value 8

Harvard Business Review

DECEMBER 2, 2013

I can’t imagine, recalling my days at Rio Tinto, the managers of a copper mine measuring and proudly reporting how much dirt was moved, how deep the hole was, and how many trucks they had procured – while staying mum about how much copper was produced. To a business person, think how absurd this would seem.

Trends 8

Trends Development Net Present Value NGO 8

Harvard Business Review

FEBRUARY 7, 2011

With political upheaval roiling the streets of Cairo, the first concern of top management in many multinationals is to get their employees and their families out of Egypt safely. Anyone who has had to make the argument for an investment knows the basic tool involved: a Net Present Value (NPV) calculation.

NPV 13

NPV Short-term Discount Politics 13

Harvard Business Review

OCTOBER 15, 2012

Know the risks and the costs. It's hard to value an idea without understanding just how much time and money it will take to implement it. As innovators engage with the market through the MVP, they learn valuable information to help them refine the product-market fit and better understand and further build for the value proposition.

Innovation 8

Innovation Execution Net Present Value Open-book 8

Harvard Business Review

AUGUST 21, 2015

This is one of the key metrics for marketing managers, says Avery. “Our job is to create products and services that have unique and sustainable value for customers compared with other options available to them in the marketplace. ” What are some of the common mistakes managers make with price elasticity?

Price 8

Price Debt to Equity Ratio Marketing Net Present Value 8

Harvard Business Review

MAY 1, 2017

The global financial crisis prompted many companies to pull in their horns, hoard cash, trim costs, and take a wary view of large investments. Capital superabundance, combined with tepid economic growth, has produced historically low capital costs for most large companies. But when capital costs are low, the time value of money is low.

ROE 14

ROE Long-term GDP Six Sigma 14

Harvard Business Review

APRIL 27, 2017

But I long for actions that go beyond admonitions to managers and boards to do better, that give both parties a better chance to stand up to capital markets players, like activist hedge funds, pressuring them to become too short-term focused. The Refresher: Net Present Value. Related Video.

Hedge 9

Hedge Short-term Long-term NPV 9

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