1173 Posts Found

When you focus on priorities, costs are not problems. They are choices. The priorities most worthy of high levels of investment are those that align with the growth priorities of your business, helping to build the capabilities that distinguish your company and contribute substantially to its success.

Content: Quotation | Authors: Deniz Caglar, Jaya Pandrangi, John Plansky | Source: strategy+business | Subjects: Finance, Management

High price-to-earnings ratios are about more than growth. Understanding the ingredients that go into a strong multiple can help executives make the most of this strategic tool.

Content: Article | Authors: Nidhi Chadda, Robert S. McNish, Werner Rehm | Source: McKinsey Quarterly | Subject: Finance

Discussions of financing often center on questions of equity and debt. But there is another, often overlooked, way that companies raise cash — selling assets, such as a division or plant, which are not core to their primary business. In a recent paper, Wharton professor Alex Edmans and PhD candidate William Mann examine the choice of issuing equity versus selling assets and discuss a new … [ Read more ]

Content: Article | Source: Knowledge@Wharton | Subject: Finance

HBS professor Matthew Rhodes-Kropf sets out to discover why public companies dominate some M&A waves while private equity firms win others.

Content: Article | Author: Kim Girard | Source: Harvard Business School (HBS) Working Knowledge | Subjects: Finance, Mergers & Acquisitions

Executives focused on having the highest multiple are missing the point. Rather, as companies with high total returns to shareholders (TRS) know, executives should focus on the amount of value they create—with regard to growth, margins, and capital productivity. Doing so won’t necessarily lead to a higher earnings multiple.

Content: Quotation | Authors: Anand Mehta, Susan Nolen Foushee, Tim Koller | Source: McKinsey Quarterly | Subject: Finance

Emotions can drive market behavior in a few short-lived situations. But fundamentals still rule.

Editor’s Note: one of the least compelling defenses of efficient or rational markets I have read, but still the topic and specific examples and issues discussed are worthy of consideration.

Content: Article | Authors: David Wessels, Marc H. Goedhart, Tim Koller | Source: McKinsey Quarterly | Subject: Finance

Most companies allocate the same resources to the same business units year after year. That makes it difficult to realize strategic goals and undermines performance. Here’s how to overcome inertia.

Content: Article | Authors: Dan P. Lovallo, Reinier Musters, Stephen Hall | Source: McKinsey Quarterly | Subjects: Finance, Management, Strategy

Severe change and exceptional returns usually don’t go together.
Most investors, of course, behave as if just the opposite were true. That is, they usually confer the highest price-earnings ratios on exotic-sounding businesses that hold out the promise of feverish change.

That prospect lets investors fantasize about future profitability rather than face today’s business realities. For such investor-dreamers, any blind date is preferable to one with the … [ Read more ]

Content: Quotation | Author: Warren Buffett | Subject: Investing

One of the primary responsibilities of a management team is to make decisions during the execution of projects so that gains are maximized and losses are minimized. Decision analysis is especially critical for projects with built-in flexibility, or options. This article explores how merging decision analysis with the well-known principles used in valuing options on financially traded assets can be further enhanced by applying an … [ Read more ]

Content: Article | Authors: Luiz E. Brando PhD, Warren J. Hahn PE PhD | Source: Graziadio Business Report | Subjects: Finance, Management

It’s not that big of a stretch to say that many CEOs – too many, perhaps – would rather learn how to hit a three wood than move up the knowledge curve on accounting. But just like you can’t ask your caddy or anyone else to hit a three wood for you, you cannot – or at least should not – ask your CFO to … [ Read more ]

Content: Article | Author: John McCallum | Source: Ivey Business Journal | Subjects: Accounting, Finance

Customer-centricity is an increasingly important requirement for competitive advantage and, ultimately, high performance. As part of this, developing a robust customer analytics strategy has become vital to help identify the segments that matter, draw insights about behavior and point the way to process changes that will impact customer loyalty and profitability. Accenture discusses how some organizations have effectively done this and outlines four principles that … [ Read more ]

Content: Article | Source: Accenture | Subjects: IT / Technology / E-Business, Market/Investment

This valuable tool can serve as both a translator of complex financial information and an indicator of opportunities for enhancing financial performance.

Content: Article | Author: John Scully PhD | Source: Graziadio Business Report | Subject: Finance

It’s a commonplace that there are some things money can’t buy. [Georg] Simmel had a more striking insight: Having money can actually be more satisfying than having the things money can buy. That’s because…money has a “surplus value.” A person with money enjoys the added satisfaction of having a choice of things to buy: “The value of a given amount of money is equal to … [ Read more ]

Content: Quotation | Source: The Wilson Quarterly | Subjects: Economics, Money, Personality / Behavior

Spinning off businesses can have real advantages in creating value—if executives understand how.

Content: Article | Authors: Bill Huyett, Tim Koller | Source: McKinsey Quarterly | Subjects: Finance, Management, Strategy

Ever since Bruce Henderson introduced the growth-share matrix, corporate portfolio management has been a big part of the CEO agenda. But a recent BCG survey, conducted with Freiberg University in Germany, reveals a major gap between the effort companies put into portfolio management and its impact on corporate decision-making.

Editor’s Note: includes and excellent overview of CPM including history and common criticisms.

Content: Article | Authors: Harald Rubner, Matthias Krühler, Michael Nippa, Robert Untiedt, Ulrich Pidun | Source: Boston Consulting Group (BCG) | Subjects: Finance, Strategy

Day-traders might say the Dow’s direction depends on the morning’s news. Pundits may cite the next winner of the Super Bowl or the political party of the next elected president. Fundamental analysts might say it depends on earnings growth. The DJIA is swayed both by economic and non-economic factors. This article estimates what portion of the Dow is economically driven and what portion is not … [ Read more ]

Content: Article | Author: Bruce Samuelson PhD | Source: Graziadio Business Report | Subjects: Economics, Finance

Math and jargon make essential financial concepts seem intimidating, but that is simply because most books do not have the goal of being accessible to interested readers – this book does. In ten easy-to-read chapters, it explains all the essential financial tools and concepts, fully illustrated with real-world examples and Excel implementations.

Editor’s Note: see a review at Content: Book | Author: Javier Estrada | Subject: Finance

“I will tell you how to become rich. Be fearful when others are greedy. Be greedy when others are fearful.”

Content: Quotation | Author: Warren Buffett | Subjects: Market/Investment, Personal Development, Success / Failure

The fundamental success of a strategy depends on three critical factors: a firm’s alignment with the external environment, a realistic internal view of its core competencies and sustainable competitive advantages, and careful implementation and monitoring. This article discusses the role of finance in strategic planning, decision making, formulation, implementation, and monitoring.

Editor’s Note: I don’t think this article really adds any new learning value or even … [ Read more ]

Content: Article | Authors: Barry Barnes PhD, Pedro M. Kono | Source: Graziadio Business Report | Subjects: Finance, Strategy

When asked to predict activity in the stock market, J.P. Morgan replied that stock prices would fluctuate. Modern finance theory ascribes meaning to these fluctuations. The stocks of successful, well-run, or lucky companies rise. Those of unsuccessful, misgoverned, or unlucky companies fall. While portfolio managers view the volatility of individual stocks as a problem to be overcome through diversification, corporate executives watch their stocks rise … [ Read more ]

Content: Article | Authors: Bernard Yeung, Randall Morck | Source: STERNbusiness (NYU) | Subjects: Economics, Finance