Remove Development Remove GAAP Remove Innovation Remove Marketing

Calculating the Market Value of Leadership

Harvard Business Review

In recent years, investors have learned that defining the market value of a firm cannot just be based on finances. GAAP and FASB standards require financial reporting of earnings, cash flow, and profitability – all measures that investors have traditionally examined. But recently, these financial outcomes have been found to predict only about 50% of a firm’s market value. Financial markets Performance measurement Leadership

GAAP 12

Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

The market caps of just four companies, Apple, Alphabet, Amazon, and Microsoft, now exceed $3 trillion. Their combined assets of $944 billion are an order of magnitude lower than the combined assets of $7,700 billion of the largest 3,177 companies in 1986, when the aggregate market capitalization reached $3 trillion for the first time. CFOs of these companies themselves admit that they cannot justify their market capitalizations based on traditional metrics.

GAAP 35
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

The Dangers of Digital Protectionism

Harvard Business

Still others hope to create market barriers for global companies — a form of digital protectionism. These include access to digital goods and services, being part of global supply chains, accelerating and partaking in the fruits of innovation, and helping citizens access information, entertainment, and connectivity on a worldwide basis. These solutions lie at the intersection of technology development by companies and policy formulation by governments.

GAAP 44

GDP Is a Wildly Flawed Measure for the Digital Age

Harvard Business

Gross Domestic Product (GDP), our core measure of prosperity, was developed during the industrial age. As the market, including customers, employees, and investors, shifts the mix of what is done and what is consumed, this most important and commonly used economic indicator, along with Generally Accepted Accounting Principles (GAAP), tells a concerning story. HBR STAFF. Germany, Switzerland, and Japan are now in negative interest rate territory. So are Denmark and Sweden.

GDP 44