What is the importance of pre-money valuation For Your Business?

Strategy Driven

Pre-money valuation is a company’s liquidity before it earns the cash from an investment round. With the contribution of cash to the balance sheet of a business through the shareholder value, the post-money value becomes stronger due to the additional cash earned.

Hospital Budget Systems Are Holding Back Innovation

Harvard Business

A second, more radical solution is to create budgets and authority for a service line or integrated practice unit (IPU) that manages a patient’s entire treatment for a high-volume medical condition. Instead, the finance office can allow the department to keep some of the savings it created, in excess of the original acquisition cost, in future year budgets. Financial management Technology Innovation Healthcare Digital ArticleGillian Blease/Getty Images.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

This notion, that risk is a desirable feature, can seem like sacrilege to anyone who’s taken an introductory finance course. However, many investors seem to have concluded that the most successful companies with tens of billions of dollars of valuation today could never have justified their valuation at the start of their operation based on discounted cash flow. So, investors, and therefore managers, might be adjusting their approach to risk accordingly.

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

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. In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches.

Why Sit on All that Cash? Firms Uncertain on Cost of Capital

Harvard Business Review

With a record $2 trillion in cash and short-term liquid assets on hand, U.S. This is the key finding of the Current Trends in Estimating and Applying the Cost of Capital research released this week by the Association for Financial Professionals, a trade group of 16,000 corporate treasury and finance practitioners. Fully 79 percent of companies, including 91 percent with annual revenues greater than $1 billion, use discounted cash flow techniques.

Still Many Ways to Skin a Capital Cost

Harvard Business Review

When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. To make sure they're comparing apples to apples, they discount those future cash flows to arrive at their net present value. Tight convergence on a best practice may not be necessary, then, in this realm of management.

DCF 12

The Largest Risk (and Opportunity) Investors Are Ignoring

Harvard Business Review

A key target for Ceres’ work, and the main audience at the conference, is the group of institutional investors who manage tens of trillions of dollars in assets for long-term performance. ” The value of the companies owning and managing those assets, the logic goes, will plummet. Economy Finance Sustainability Tackling climate change — and thus keeping the world inhabitable — is an achievable goal, but it will become prohibitively expensive if we wait to act.