Harvard Business Review

MARCH 31, 2017

If you’re not a numbers person, finance is daunting. But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. Stop avoiding finance because you’re afraid of numbers. Think of it this way, “Finance is the way businesses keep score.

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

MARCH 10, 2011

To make sure they're comparing apples to apples, they discount those future cash flows to arrive at their net present value. That's the finding of a new survey on how financial professionals determine their cost of capital, presented in a separate post on HBR.org today. Yeh, William S. Schulze, and Michael H.

CAPM 15

CAPM Cost Discounted Cash Flow Cost of Capital 15

Harvard Business Review

FEBRUARY 7, 2011

Anyone who has had to make the argument for an investment knows the basic tool involved: a Net Present Value (NPV) calculation. The overall value of a foreign investment is equal to the NPV of the expected stream of profits for the life of the investment.

NPV 15

NPV Short-term Discount Politics 15

Harvard Business Review

NOVEMBER 25, 2013

This lack of an analytical approach has traditionally formed a barrier between marketing and finance. In our work with clients across dozens of sectors over more than five years, we have found that the strongest CMO/CFO partnerships develop when both parties undertake five actions: 1.

CFO 9

CFO Short-term Long-term Benchmarking 9

Harvard Business Review

FEBRUARY 24, 2011

But why compare apples (book value) to oranges (share price and dividends)? Buffett explains that book value is the best proxy for "intrinsic value," the net present value of all estimated future cash flows. Consider that since 1965, Berkshire's book value grew 434,057% and the S&P index grew only 5,430%.

Letter 15

Letter P&L Insurance Net Present Value 15

Harvard Business Review

JUNE 8, 2018

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. This notion, that risk is a desirable feature, can seem like sacrilege to anyone who’s taken an introductory finance course.

Report 8

Report GAAP Net Present Value CFO 8

Harvard Business Review

MAY 1, 2017

Today, the average cost of equity capital sits at close to half that: just 8% for the roughly 1600 companies comprising the Value Line Index. So, in real terms, debt financing is essentially free. In these circumstances, strategies that generate faster growth create more value for most companies than those that improve profit margins.

ROE 15

ROE Long-term GDP Short-term 15