Remove Examples Remove Finance Remove Operations Remove Rate of Return
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101 Things I Learned in Business School

Leading Blog

B USINESS is not a discipline, but an endeavor made up of disciplines such as accounting, communications, economics, finance, leadership, management, marketing, operations, psychology, sociology, and strategy. perpetually exceed the cash receipts from the previous, smaller sales volume.

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The Most Common Mistake People Make In Calculating ROI

Harvard Business Review

Sure, you may know this already, but people who haven’t studied finance often find this statement confusing. HBR TOOLS: Return on Investment. Finance & Accounting Tool. Let’s look at an example: A midsize manufacturing company wants to know whether to invest in a new $10 million facility. Excerpted from.

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Should Companies Retain "Strategic" Cash?

Harvard Business Review

To enhance financial flexibility, companies have been retaining unprecedented amounts of cash on their balance sheets, calling it "strategic" cash to distinguish it from the "operating" cash that is needed to run the business. Arguments for Strategic Cash. Facilitate Investments. energy or telecom) or research-intensive industries (e.g.,

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The Case for Stock Buybacks

Harvard Business Review

But these claims are very rarely backed up by large-scale evidence, and often driven by a misunderstanding of how buybacks actually operate. Fewer companies would go public, instead financing themselves by taking on more debt. In this way, repurchases are targeted: they return cash to shareholders with the best other uses for it.

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A Refresher on Cost of Capital

Harvard Business Review

. “At most companies, the cost of capital is a mechanical calculation done by the finance people. Then the management team takes that number and decides on the discount rate, or hurdle rate, that you have to exceed to justify an investment,” he says. or 11% as the discount rate. or 11% as the discount rate.

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3 Emerging Market Risks Companies Should Watch for in 2018

Harvard Business Review

They did not spend as much time thinking about local events that have implications for their emerging market operations. We believe that business-friendly candidates could win, but companies should make sure that their Mexico investments have an acceptable rate of return even under this populist scenario.