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. Vinod K.

NPV 15

NPV Short-term Discount Politics 15

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

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. Furthermore, the operating managers cannot take their eyes off day-to-day operations to focus on innovation. Traditional companies therefore rely on two strategies.

Report 11

Report GAAP Net Present Value CFO 11

Harvard Business Review

JULY 1, 2016

The first believes the company’s goal is to maximize shareholder value. Countries that operate under common law, including the United States and the United Kingdom, lean in this direction. Countries that operate under civil law, including France, Germany, and Japan, tend to be in this camp. .”

Short-term 13

Short-term Long-term Objective Incentives 13

Harvard Business Review

SEPTEMBER 13, 2017

Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years. For slaughterhouses and retailers (Brazilian operations), we also projected positive benefits: $20 million to $120 million (0.01% to 0.1% of revenues).

Supply Chain 9

Supply Chain Net Present Value Retail Cost of Capital 9

Harvard Business Review

OCTOBER 3, 2011

The research in this area points to three salient points: First, the value of the business is the present value of future cash flows. Executives can reverse engineer those expectations, generally expressed through value drivers, and compare them to the company's internal forecasts.

Short-term 15

Short-term Long-term Price CEO 15

Harvard Business Review

MARCH 29, 2018

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.

Budgeting 9

Budgeting System Innovation Payback Period 9

Harvard Business Review

FEBRUARY 24, 2014

While on the surface, the dirty business of fossil fuels is nothing like Silicon Valley, many in the oil business have moved beyond the standard net present value (NPV) model for assessing the merit of investments. What if I suggested that the best place to look for answers could be the shale oil fields of North Dakota?

NPV 10

NPV Net Present Value Industry Video 10

Harvard Business Review

DECEMBER 2, 2013

Three lines of progress are crossing, and rapidly reshaping how businesses and nonprofits together strengthen the locales in which they operate. Child sponsorships have been operating since 1953, and all of them share the high-level objective of breaking the cycle of poverty. This is what is going on now in community development.

Trends 9

Trends Development Net Present Value NGO 9

Harvard Business Review

JUNE 18, 2015

” PE firms typically take three types of value increasing actions — financial engineering, governance engineering, and operational engineering. These value-increasing actions are not necessarily mutually exclusive, but it is likely that certain firms emphasize some of the actions more than others. (We

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

APRIL 9, 2015

That statement records cash generated by a company’s operations and cash spent on those operations; cash spent on capital assets (and cash generated by the sale of capital assets); and cash received from, or paid to, lenders and shareholders. Income statements almost always include an allowance for depreciation of capital assets.

ROI 8

ROI Analysis Rate of Return Net Present Value 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. Some focus their best people on finding ways to squeeze out more profitability from existing operations, rather than creating new businesses.

ROE 16

ROE Long-term GDP Six Sigma 16

Harvard Business Review

AUGUST 3, 2018

Investors, therefore, look not just for reported revenues but for drivers behind the revenues, especially because digital companies’ operating activities often differ from their revenue-generating activities. The first category should describe the amount spent on supporting current operations.

Report 8

Report GAAP Company Proposal 8

Harvard Business Review

NOVEMBER 25, 2013

CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment. Creating transparency into its operations is the starting point for marketing to help CFOs understand where and how value is being gained or lost, which makes budgeting discussions much more productive.

CFO 9

CFO Short-term Long-term Benchmarking 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 most important concepts to grasp are “how to measure profitability, EBITDA, operating income, revenue, and operating expenses,” he says. The Refresher: Net Present Value.

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

SEPTEMBER 27, 2012

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. Within three years, ALL's Brazilian rail operations had increased revenues by 50% and tripled EBITDA.

Strategy 9

Strategy Proposal Guidelines Net Present Value 9

Harvard Business Review

NOVEMBER 19, 2015

This can be quantified by analyzing the extent to which the share prices of S&P 500 firms are driven by a firm’s present value of future growth options (PVGO) rather than cash flow from current operations. Our research shows that U.S. Some firms manage to maintain this dual discipline as they grow.

Company 8

Company Succession Maturity Business Model 8

Harvard Business Review

MARCH 23, 2015

They’re essentially asking the company to take the cash it has generated through its business operations and spend it on something with an uncertain future return. Do you think they’re going to do a net present value (NPV) analysis that shows they don’t need that computer? Here’s why. Excerpted from.

Finance 8

Finance NPV CFO ROI 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. Companies that will eventually be wrecked by others’ innovations are operating on autopilot. Discovery-Driven Growth : A Breakthrough Process to Reduce Risk and Seize Opportunity by Rita McGrath.

Innovation 50

Innovation NPV Business Model Constraint 50