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The INs and OUTs of Business Literacy

HR Digest

Joe works with managers and leaders at Fortune 500 companies such as NBCUniversal, General Electric, Berkshire Hathaway, Southwest Airlines, Boeing, United Technologies, and Electronic Arts. Joe has also written toolkits for Harvard Business Press including the ROI Toolkit, Understanding EBITDA, and the Business Valuation Toolkit.

Finance 63
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How Mature is Your Risk Management?

Harvard Business Review

For years, companies have been pouring money into people, processes, and technology that can help them manage risk. They clearly generate higher growth in revenue, EBITDA, and EBITDA/EV. Companies in the top 20% of risk maturity generated three times the level of EBITDA as those in the bottom 20%.

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We Can’t Study Short-Termism Without the Right Metrics

Harvard Business Review

Third, firms understate their depreciation expense because they assume that their long-lived assets will retain their worth over the long term — even though technological change increasingly makes them obsolete. Such misplaced optimism potentially masks underinvestment in technology needed to keep up with the competition.

EPS 8
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Morning Advantage: A Supply Chain Solution to an Age-Old Problem

Harvard Business Review

Both the primary and secondary buyers added value in the same way — increasing EBITDA through operational improvements (an average of 14% in the first round, 13% the next) and growing revenue by increasing compound annual sales (both by 10%). Here’s Where They Make China’s Cheap Android Smartphones (Technology Review).

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Can We Quantify the Value of Connected Devices?

Harvard Business Review

And this addresses the commercial value creation question – P&G’s mindset was to create operational efficiencies that would contribute to healthy EBITDA margins. What’s different now is the volume of the data, the availability of efficient sensor technologies, and the prospect of application in every walk of life.

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Entrepreneurs Need a Better Way to Cash Out

Harvard Business Review

But in technology startups, particularly venture-backed technology startups, the current investment climate does not always support that vision. But analysts are judging EBITDA, P/E ratios, quarterly growth, and cashflows – which don’t always correlate with long-term value creation.

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How to Anticipate a Burning Platform

Harvard Business Review

In another example Innosight has researched, Xerox was forced to lay off nearly 40,000 of its 91,000 workers from 2000 to 2005 to return to profitability and make way for its transformation from a technology company into a services company. It's only this year, for the first time, that services revenue surpassed technology revenue.

EBITDA 8