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Rethinking Valuation So You Don't Miss a Good Deal

Harvard Business Review

To do this, we combine two separate frameworks: the first is the Three Horizon strategic model developed by McKinsey. Horizon 1 (H1) represents the current core operations of a company that produce the cash flow needed to sustain operations, to meet investor expectations, and to invest in future growth.

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Will You Be Writing Off Your Investment in Egypt?

Harvard Business Review

Anyone who has had to make the argument for an investment knows the basic tool involved: a Net Present Value (NPV) calculation. The overall value of a foreign investment is equal to the NPV of the expected stream of profits for the life of the investment.

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Old Buildings Are U.S. Cities’ Biggest Sustainability Challenge

Harvard Business Review

Today large commercial buildings address only two percent per year of the NPV-positive investments in efficiency that are available to them. Addressing energy use in existing large commercial buildings has proven notoriously difficult.

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Lafley’s P&G Brand Cull and the 80/20 Rule

Harvard Business Review

Declaring he’d cull up to 100 brands — many of which he’d acquired and developed — P&G CEO A.G. “Importantly, this will be a much simpler, much less complex company of leading brands that’s easier to manage and operate.” P&G is cutting its global brand portfolio by more than half.

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How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business Review

The most important concepts to grasp are “how to measure profitability, EBITDA, operating income, revenue, and operating expenses,” he says. Next time you're deciding about a big investment, NPV can help you make a more informed decision. Related Video. The Refresher: Net Present Value. ” scenarios.

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Stop Focusing on Profitability and Go for Growth

Harvard Business Review

Next time you're deciding about a big investment, NPV can help you make a more informed decision. In our experience, companies still focus more on cutting costs than on developing and executing new growth strategies. Related Video. The Refresher: Net Present Value.

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Reflecting on David Garvin’s Imprint on Management

Harvard Business Review

Garvin was a generalist more than a specialist, perhaps because he came of age at HBS during the 1980s, when the school’s primary focus was the development of skilled general managers. One of the many articles circling back to this topic of late revisited the still-common use of NPV hurdles in investment decisions.)