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 Net Present Value Insurance 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

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. Some of these ideas contradict traditional financial thinking whereas others seem highly controversial or pessimistic.

Report 11

Report GAAP Net Present Value CFO 11

Harvard Business Review

OCTOBER 15, 2012

Companies knew how to engage a design firm, license IP, and form joint ventures, but few knew how to truly co-develop innovations with external partners, such as PARC. Net Present Value ). It turns out that companies tend to do well when they focus on their short-term business or develop options for long-term growth.

Innovation 10

Innovation Execution Net Present Value Open-book 10

Harvard Business Review

OCTOBER 16, 2013

Most companies – including the movie studios in Hollywood – over-rely on basic tools like discounted cash flow and net present value. But it is possible to significantly improve your odds by understanding which decision-support tools work best for which decisions.

Discounted Cash Flow 8

Discounted Cash Flow Net Present Value Comparison Tools 8

Harvard Business Review

MAY 1, 2017

In these circumstances, strategies that generate faster growth create more value for most companies than those that improve profit margins. The Refresher: Net Present Value. In these settings, investors should value strategies that accelerate growth over those that improve margins (see the chart below).

ROE 16

ROE Long-term GDP Six Sigma 16

Harvard Business Review

NOVEMBER 25, 2013

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. CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment.

CFO 9

CFO Short-term Long-term Benchmarking 9

Harvard Business Review

DECEMBER 11, 2013

These were engineers and network planners; surely, they understood economics and net present value analysis. If South Africa was to develop, it could not afford to ignore the technocrats entirely. Still frustrated, I walked the corridors of South Africa Telkom and ran into the old guard. I told them my story.

Net Present Value 9

Net Present Value Politics Analysis Telecommunications 9

Harvard Business Review

SEPTEMBER 27, 2012

Next, ALL's CEO assembled a cross-functional team to develop simple rules for prioritizing capital spending. To prioritize projects, for instance, the ALL team could have forecast future cash flows for every potential investment and ranked all proposals on the basis of their net present value. reuse existing resources.

Strategy 9

Strategy Proposal Guidelines Net Present Value 9

Harvard Business Review

MARCH 31, 2017

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. The Refresher: Net Present Value. ” The goal is to develop an understanding of how your day-to-day actions help your employer to “drive revenue or mitigate costs,” he says.

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

JUNE 18, 2015

In operational engineering, PE firms develop industry and operating expertise that they bring to bear to add value to their portfolio companies. In governance engineering, PE investors control the boards of their portfolio companies and are more actively involved in governance than public company directors and public shareholders.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Strategy Driven

SEPTEMBER 9, 2011

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. Tools for each challenge are presented, backed by examples from companies – from small firms to global giants – that have successfully put these methods into practice.

Innovation 50

Innovation NPV Business Model Constraint 50