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Rethinking Valuation So You Don't Miss a Good Deal

Harvard Business Review

The odds of a successful acquisition are long — something research has proven time and again — yet executives show no signs of losing interest in M&A. The higher level of uncertainty associated with H2 and H3 necessitates an updated valuation methodology that takes into account more than the net present value (NPV) of the target.

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How Marketers Can Avoid Big Data Blind Spots

Harvard Business Review

These estimates can then help determine the Net Present Value (NPV) of the long term effect of marketing in terms of future sales. Given the overwhelming success of this effort, the brand considered shifting significant spend from TV and print advertising to digital and social media channels. customer surveys).

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Why Is an App Worth as Much as a Small Oil Field?

Harvard Business Review

While on the surface, the dirty business of fossil fuels is nothing like Silicon Valley, many in the oil business have moved beyond the standard net present value (NPV) model for assessing the merit of investments. What if I suggested that the best place to look for answers could be the shale oil fields of North Dakota?

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

Harvard Business Review

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. “If you can speak the language of money, you will be more successful,” he says. The Refresher: Net Present Value. If you’re not a numbers person, finance is daunting.

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What If Investors Who Held Their Shares Longer Got More Voting Power?

Harvard Business Review

The Refresher: Net Present Value. Next time you're deciding about a big investment, NPV can help you make a more informed decision. This would frustrate the “arbs” ( arbitrageurs ) who make their returns by buying up shares and hoping to sell to the acquirer at the time of their successful takeover bid.

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Stop Focusing on Profitability and Go for Growth

Harvard Business Review

In these circumstances, strategies that generate faster growth create more value for most companies than those that improve profit margins. The Refresher: Net Present Value. Next time you're deciding about a big investment, NPV can help you make a more informed decision. Related Video.

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Is Your Business Biased Against Innovation?

Strategy Driven

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital.