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Walmart Broadens ROI for Green Power

Harvard Business Review

But amidst a seemingly scripted set of responses on Walmart's supply chain and operational greening efforts, the discussion took an interesting turn. Second, Bedore spoke about how Walmart thinks about its investments in green power: "There is an ROI calculation on all sustainability investments like on all projects, but.we

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The Most Common Mistake People Make In Calculating ROI

Harvard Business Review

That statement records cash generated by a company’s operations and cash spent on those operations; cash spent on capital assets (and cash generated by the sale of capital assets); and cash received from, or paid to, lenders and shareholders. At first glance the return looks great: 30% every year. Evaluate the investment.

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The Case for Stock Buybacks

Harvard Business Review

But these claims are very rarely backed up by large-scale evidence, and often driven by a misunderstanding of how buybacks actually operate. Investment only creates value if its returns are higher than the other projects shareholders could invest in. Such a nefarious use of corporate funds makes for great headlines.

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Should Companies Retain "Strategic" Cash?

Harvard Business Review

To enhance financial flexibility, companies have been retaining unprecedented amounts of cash on their balance sheets, calling it "strategic" cash to distinguish it from the "operating" cash that is needed to run the business. high technology or pharmaceutical) that are investing in projects with uncertain long-range payoffs.

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A Refresher on Cost of Capital

Harvard Business Review

Then the management team takes that number and decides on the discount rate, or hurdle rate, that you have to exceed to justify an investment,” he says. In many businesses, the cost of capital is lower than the discount rate or the required rate of return. or 11% as the discount rate. x 4.3%) + (0.7

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The Comprehensive Business Case for Sustainability

Harvard Business Review

This can disrupt a firm’s ability to operate on schedule and budget. Of the respondents, 72% said that climate change presents risks that could significantly impact their operations, revenue, or expenditures. billion in mining projects since 2010. ” Improving risk management. Fostering innovation.

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3 Emerging Market Risks Companies Should Watch for in 2018

Harvard Business Review

They did not spend as much time thinking about local events that have implications for their emerging market operations. We believe that business-friendly candidates could win, but companies should make sure that their Mexico investments have an acceptable rate of return even under this populist scenario.