Harvard Business Review

OCTOBER 16, 2013

It’s impossible to eliminate risk from strategic decision making, of course. Most companies – including the movie studios in Hollywood – over-rely on basic tools like discounted cash flow and net present value. These tools are great if you’re working in a stable environment, with a business model you understand.

Discounted Cash Flow 8

Discounted Cash Flow Net Present Value Comparison Tools 8

Harvard Business Review

MARCH 23, 2015

Do you think they’re going to do a net present value (NPV) analysis that shows they don’t need that computer? Of course not. Of course he said, “Well, if that’s your conclusion, then I know your analysis is wrong, because I know we need the printer.” ” What do you think he said?

Finance 8

Finance NPV CFO ROI 8

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. Of course, there are also myriad books and reference guides on the topic. The Refresher: Net Present Value. If you’re not a numbers person, finance is daunting. Related Video.

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

MAY 29, 2017

And finally, writing a values statement is used as the start of an ongoing, transformational journey, not the conclusion of one. When these three conditions aren’t present, values can get hijacked and misused. Without accountability, values become a weapon to punish. Here’s how it happens: 1.

Bottom-up 9

Bottom-up Competitive Advantage Organization Workshop 9

Harvard Business Review

NOVEMBER 19, 2015

This can be quantified by analyzing the extent to which the share prices of S&P 500 firms are driven by a firm’s present value of future growth options (PVGO) rather than cash flow from current operations. At that point, it is often too late to course-correct. Our research shows that U.S.

Company 8

Company Succession Maturity Long-term 8

Harvard Business Review

NOVEMBER 25, 2013

CMOs do have plenty of data, of course, but it’s often not the data that the CFO is looking for. CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment. Marketing KPIs need to incorporate customer acquisition and retention targets and costs.

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

SEPTEMBER 27, 2012

To prioritize projects, for instance, the ALL team could have forecast future cash flows for every potential investment and ranked all proposals on the basis of their net present value. But like most complicated models, that approach would have had many disadvantages relative to simple rules.

Strategy 8

Strategy Proposal Guidelines Net Present Value 8

Harvard Business Review

JUNE 18, 2015

For instance, despite the prominent role that discounted cash flow valuation methods play in academic finance courses, few PE investors use discounted cash flow or net present value techniques to evaluate investments. Rather, they rely on internal rates of return and multiples of invested capital.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

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. Many people do not typically think of metrics and accounting as roadblocks to innovation, yet you call these out as potential problem areas. It drives me crazy and is very shortsighted.

Innovation 50

Innovation NPV Business Model Constraint 50