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Stop Focusing on Profitability and Go for Growth

Harvard Business Review

So, in real terms, debt financing is essentially free. Equity cash flows, in turn, are a function of a company’s long-term return on equity (ROE), growth, and the value of shareholders’ equity on its books. But in most other sectors, ROEs are much greater than the cost of equity capital.

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End the Religion of ROE

Harvard Business Review

corporation than "what's the ROE on that?" ROE justifies the means. To an extent not widely recognized, it was an equation in the first place that gave ROE the power to dominate not just investment decisions, but an entire business culture. There is no more powerful question in a U.S. Social media spending? Wellness checkups?

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