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

Harvard Business Review

” PE firms typically take three types of value increasing actions — financial engineering, governance engineering, and operational engineering. In operational engineering, PE firms develop industry and operating expertise that they bring to bear to add value to their portfolio companies.

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Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

operating rooms, recovery floors, emergency department), and ancillary departments (e.g., Consider, for example, a surgical patient who starts in the pre-operative area, then moves to the operating room, the post-anesthesia care unit, and the inpatient floor, with occasional side trips for imaging, testing, and physical therapy.

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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. Combining these creates a P&L and a projection, which through a discounted cash flow analysis yields an NPV, which can be used to assess valuation.

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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

However, many investors seem to have concluded that the most successful companies with tens of billions of dollars of valuation today could never have justified their valuation at the start of their operation based on discounted cash flow. Investors are paying more attention to ideas and options than to earnings.

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How Corporate Investors Can Improve Their Odds

Harvard Business Review

The operative question for them is, not “How confident am I that this investment will yield a positive return?” Ideas with positive discounted cash flows get investment. but “How much can we afford to lose on a given investment?”. One – possibly more promising — receives one more round of funding.