Harvard Business Review

OCTOBER 25, 2018

To analyze the superstar dynamics of firms, our metric was economic profit, a measure of a firm’s profit above and beyond opportunity cost. (To To do this, we take the firm’s returns, deduct the cost of capital, and multiply by the firm’s total invested capital.)

Industry 15

Industry Company GDP Bottom-up 15

Harvard Business Review

NOVEMBER 7, 2012

Rappaport showed that, in setting a price, the market offers a clear signal that can inform operational and financial decisions. As a liberal arts major with very limited exposure to business or finance, I found the stock market fascinating but bewildering. Rappaport's article was published shortly after I graduated from college.

Price 8

Price Analysis Cost of Capital Disruptive Innovation 8

Harvard Business Review

JUNE 18, 2015

In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches. ” PE firms typically take three types of value increasing actions — financial engineering, governance engineering, and operational engineering.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

APRIL 9, 2015

Sure, you may know this already, but people who haven’t studied finance often find this statement confusing. Finance & Accounting Tool. Income statements almost always include an allowance for depreciation of capital assets. Excerpted from. HBR TOOLS: Return on Investment. Joe Knight. Add to Cart.

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

NOVEMBER 25, 2013

This lack of an analytical approach has traditionally formed a barrier between marketing and finance. Creating transparency into its operations is the starting point for marketing to help CFOs understand where and how value is being gained or lost, which makes budgeting discussions much more productive. Ask for the CFO’s help.

CFO 9

CFO Short-term Long-term Benchmarking 9

Harvard Business Review

OCTOBER 10, 2017

One reason for the paltry performance is that while other business areas, like sales or finance, are considered to be core functions, innovation is often considered to be something that’s “nice to have” rather than essential. Another pervasive reason is that senior executives are trained as operators, not innovators.

Innovation 9

Innovation P&L ROI Long-term 9

Harvard Business Review

DECEMBER 13, 2017

Investors punish companies with a short-term orientation by applying higher discount rates to them, which increases the cost of capital for those companies. In contrast, companies with a long-term orientation are rewarded with a lower cost of capital, which allows them to afford more innovation—a virtuous cycle.

Short-term 9

Short-term Decentralization Company Trends 9

Harvard Business Review

FEBRUARY 7, 2017

New research, led by a team from McKinsey Global Institute in cooperation with FCLT Global , found that companies that operate with a true long-term mindset have consistently outperformed their industry peers since 2001 across almost every financial measure that matters. In this case its capital charge is $800 times 8%, or $64.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

MARCH 1, 2017

Most firms cite opportunities to reduce friction and costs. After all, most financial intermediaries themselves rely on a dizzying, complex, and costly array of intermediaries to run their own operations. If the world of venture capital can change radically in one year, what else can we transform?

Finance 8

Finance IPO Banking Venture Capitalist 8