Performance Measurement

Strategy Driven

Supplementing profits with ROIC and revenue growth is a step in the right direction to ensure that the profits a business earns are actually creating value, not simply over-consuming capital that another company could better deploy.


Death Knell for the Category Killers?

Harvard Business Review

Retail store asset productivity has been in decline since the recession of 2007 and we believe that this trend will accelerate over the coming years. During the current recession, overall consumer spending has declined or held flat, sales per square foot have not improved significantly, and retailers' return on invested capital (ROIC) has suffered dramatically. Bricks and Mortar store productivity declines will likely accelerate over the coming decade. Internet Retail ROIC

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What If Companies Managed People as Carefully as They Manage Money?

Harvard Business Review

Based on our research , inspired employees are three times more productive than dissatisfied employees, but they are rare. A veritable alphabet soup (ROA, RONA, ROIC, ROCE, IRR, MVA, APV, and the like) exists to measure our financial capital. To measure human capital, you can deploy metrics such as our productive power index , which looks at the cost of organizational drag and the benefits of effective talent and energy management on your overall productive power.


CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

The results can be impressive: if your firm’s return on invested capital is 8% and you have an 8% cost of capital, a 1% improvement in ROIC will increase firm value by 19%.


How Companies Can Use Investors to Their Advantage

Harvard Business Review

The plan involved reforming Nikon’s struggling semiconductor lithography and imaging productsunits, both potentially high-value-added businesses, by cutting fixed costs, reducing SKUs and focusing on high-value-added product lines. It would implement targets linked to shareholder value, including ROE and ROIC. Heini Wehrle/BIA/Minden Pictures/Getty Images. Most companies see investor relations as a one-way street.