Remove Development Remove Finance Remove Net Present Value
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How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business Review

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.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

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.

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How CMOs Can Get CFOs on Their Side

Harvard Business Review

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.

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Still Many Ways to Skin a Capital Cost

Harvard Business Review

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
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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

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. What PE firms do after they invest.

CAPM 8
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Stop Focusing on Profitability and Go for Growth

Harvard Business Review

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.

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Will You Be Writing Off Your Investment in Egypt?

Harvard Business Review

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.

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