article thumbnail

Adapt Your Strategy to Higher Interest Rates

Harvard Business Review

To do that, executives need to rediscover the concept of economic profit (EP) — that is, revenue minus not just operating and administrative costs, but also the cost of the capital needed to produce that revenue.

EPS 22
article thumbnail

Business Needs to Do What Government Can't

Harvard Business Review

Just under 1,000 companies account for half of the world's market capitalization, Eccles notes. Breakthrough requires an end to systemic inequities by opening up processes, information - and markets. Companies like Unilever are on an open innovation drive, while GSK and Novartis are focusing on access to medicines in poorer markets.

EPS 8
Insiders

Sign Up for our Newsletter

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

article thumbnail

How Amazon Trained Its Investors to Behave

Harvard Business Review

That opportunistic approach to financial markets has defined Amazon since it went public in 1997. Well, he's a hedge fund veteran who has always taken a skeptical view of Wall Street, treating it more as a loopy rich uncle than the efficient information processor of standard finance theory. With Amazon, though, nobody emphasizes EPS.

article thumbnail

Finally, Proof That Managing for the Long Term Pays Off

Harvard Business Review

Among the firms we identified as focused on the long term, average revenue and earnings growth were 47% and 36% higher, respectively, by 2014, and market capitalization grew faster as well. public market capitalization over this period. Earnings-per-share (EPS) growth: Difference between EPS growth and true earnings growth.

article thumbnail

The 6 Ways Business Leaders Talk About Sustainability

Harvard Business Review

For anyone with a pension linked to market performance, that is a good thing. Firms like these have created tools like Environmental Profit & Loss (EP&L) statements and Social Return on Investment (SROI) to capture a more complete picture of their businesses. billion years of evolution to find solutions for climate change.

Morale 8
article thumbnail

What Apple Should Do with Its Massive Piles of Money

Harvard Business Review

In this letter, I’d like to explain more fully why I view the $51 billion already spent by Apple on open market (including accelerated) share repurchases under your leadership as a major misallocation of resources for both the company and the U.S. Rather, they trade in outstanding shares in the hope that their market price will increase.