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Rethinking Valuation So You Don't Miss a Good Deal

Harvard Business Review

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. Since the Three Horizons represent different levels of uncertainty, they need to be managed and valued differently. Alexander B.

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Will You Be Writing Off Your Investment in Egypt?

Harvard Business Review

With political upheaval roiling the streets of Cairo, the first concern of top management in many multinationals is to get their employees and their families out of Egypt safely. Anyone who has had to make the argument for an investment knows the basic tool involved: a Net Present Value (NPV) calculation.

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When It Pays to Think Like a Finance Manager

Harvard Business Review

Most finance managers in both large and small businesses encounter numerous proposals for capital investments and many of the people proposing these investments don’t have a clear picture of what the return will be. Do you think they’re going to do a net present value (NPV) analysis that shows they don’t need that computer?

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Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

operating rooms, recovery floors, emergency department), and ancillary departments (e.g., Consider, for example, a surgical patient who starts in the pre-operative area, then moves to the operating room, the post-anesthesia care unit, and the inpatient floor, with occasional side trips for imaging, testing, and physical therapy.

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

Harvard Business Review

“Importantly, this will be a much simpler, much less complex company of leading brands that’s easier to manage and operate.” ” Choosing to lead and manage in accord with that empirical insight has enormous organizational and operation repercussions.

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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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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.)