1173 Posts Found

Learn more about the five core components of a resilient finance operating system and how this new lens enables your organization to focus on growth in the face of unexpected shocks—and drive organizational success.

Content: Article | Authors: Affan Mian, Christopher Napoli, Jeff Postma, Tawfik Jamjoum | Source: Kearney | Subject: Finance

To do it right, let go of your company’s “evolutionary past” and take a granular look at where your profitability comes from today—it might surprise you.

Content: Article | Author: Jonathan Byrnes | Source: Chief Executive | Subjects: Finance, Management

Instead of just looking at new innovation opportunities through the classic lens of financial impact/ROI, organizations should be evaluating opportunities against a “triple bottom line” consisting of people (community/social impact), profit (financial return), and planet (environmental benefit). There is an opportunity to leverage impact investing metrics like Impact Multiple of Money (IMM) that combine all three lenses.

Content: Quotation | Authors: Sanjay Macwan, Scott A. Snyder | Source: Knowledge@Wharton | Subjects: Finance, Innovation

The leading companies are harnessing the power of data to lessen the impact of inflation on their business and maintain profit margins.

Content: Article | Authors: Cristobal Lowery, Jean-Paul Savelkoul, Remko de Bruijn, Roger van Engelen | Source: Kearney | Subjects: Finance, Operations

Investors consult detailed, quantitative models before making decisions. Shouldn’t corporate managers have a similar  understanding of how the market values their company, so they can make informed decisions to maximize shareholder value? An EY-Parthenon analysis of quarterly data from thousands of companies in hundreds of industries over a period of 20 years has identified six critical factors that account for most of the variability in … [ Read more ]

Content: Article | Authors: John Trustman, Louise Keely | Source: Harvard Business Review | Subject: Finance

Weighted average and median P/E ratios rarely diverge significantly—and when they do, the gap soon closes.

Content: Article | Author: David Schwartz | Source: McKinsey Quarterly | Subjects: Finance, Market/Investment

Companies often shy away from the method because they fear it or believe it means “budgeting from zero.” In reality, it’s a structured process that can build a culture of cost management.

Content: Article | Authors: Carey Mignerey, Kyle Hawke, Shaun Callaghan | Source: McKinsey Quarterly | Subjects: Accounting, Finance

Corporate finance defines the boundary of a company based on physical assets: land, buildings, warehouses, factories, machines, inventory, and patents. Based on expected risks and returns, it then determines the optimal way of financing from those assets, using a mix of debt and equity. Planning is based on measures such as return on assets, payback period, and internal rate of return.

A new framework is required … [ Read more ]

Content: Quotation | Authors: Anup Srivastava, Vijay Govindarajan | Source: Harvard Business Review | Subject: Finance

Traditional budgeting is like trying to square a circle, because the process tries to meet three ultimately incompatible objectives. First, budgeting sets targets to motivate and promote performance. These targets require directional and stretch goals. Second, budgeting provides forecasts of what lies ahead, but the forecasts only work if they are realistic, unbiased predictions. Production, for example, has to know what the expected sales are, … [ Read more ]

Content: Quotation | Authors: Bjarte Bogsnes, Hardik Sheth, Sebastian Stange | Source: Boston Consulting Group (BCG) | Subject: Finance

Understanding how a person wants to view themselves is actually incredibly valuable. It tells you a lot about how you can mirror that feeling back to them with your product while still satisfying their actual preferences.

Content: Quotation | Author: Jane Davis | Source: First Round Review | Subjects: Customer Related, Market Research, Market/Investment

New proposed restrictions on companies buying back their own stock would likely backfire.

Content: Article | Authors: Alice Bonaimé, Theo Vermaelen | Source: INSEAD Knowledge | Subject: Finance

At most large companies, the performance management system is a hodgepodge of legacy systems. KPIs are not aligned across the organization. Different information systems categorize data differently. Decision rights as to who decides what data to collect are so distributed that there is no consistent approach to reporting across the entire company.

As a result, the finance organization spends an inordinate amount of time simply putting … [ Read more ]

Content: Article | Authors: Alexander Roos, James Tucker, Jeff Kotzen, Julien Ghesquieres, Marc Rodt, Tim Nolan | Source: Boston Consulting Group (BCG) | Subjects: Finance, Management

Among CFOs, alternative approaches to budgeting are getting a lot of attention. In particular, Beyond Budgeting, a concrete alternative to traditional budgeting, is gaining mainstream traction. The approach is producing impressive results at a growing number of global companies. Moreover, a BCG study confirmed that Beyond Budgeting has significant benefits: 59% of 174 finance executives surveyed reported increased sales, 56% saved significant costs in the … [ Read more ]

Content: Article | Authors: Bjarte Bogsnes, Hardik Sheth, Sebastian Stange | Source: Boston Consulting Group (BCG) | Subject: Finance

A new approach to uncovering the sum of all the parts of a modern firm.

Content: Article | Authors: Frederico Belo, Maria Ana Vitorino | Source: INSEAD Knowledge | Subjects: Accounting, Finance

McKinsey analysis of more than 2,200 large global companies reveals the importance of monitoring both economic-profit growth and revenue growth.

Content: Article | Authors: Peter Stumpner, Tim Koller, Vartika Gupta | Source: McKinsey Quarterly | Subject: Finance

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New tools that help pinpoint complexity’s cost—and where it comes from—can help companies make better tradeoffs in managing product portfolios.

Authors: Alessandro Faure Ragani, Bikramjit Chaudhury, Ruth Heuss, Thorsten Schleyer | Source: McKinsey Quarterly | Subjects: Finance, Operations

About one-third of US companies reallocate no more than 1 percent of their resources from year to year. Whether through bias, office politics, or plain old inertia, they simply roll this year’s plan into next year. It should, by now, go without saying that this is a terrible starting position from which to expect transformative change. Companies can escape the cycle by creating target portfolios, … [ Read more ]

Content: Quotation | Authors: Chris Bradley, Marc de Jong, Wesley Walden | Source: McKinsey Quarterly | Subjects: Finance, Management

Can an algorithm outperform the average angel investor? And if it can, does that also mean it will make less biased investments? Researchers put these questions to the test: They built an investing algorithm and put it head to head with 255 angel investors in a simulation, asking it to select the most promising investment opportunities among 623 deals from one of the largest European … [ Read more ]

Content: Article | Authors: Charlotta Siren, Dietmar Grichnik, Ivo Blohm, Joakim Wincent, Malin Malmstrom, Torben Antretter | Source: Harvard Business Review | Subjects: Entrepreneurship, Finance, Venture Capital

Professor Edward I. Altman of the Stern School of Business, New York University, is a leading expert in credit and debt. He has written or edited two dozen books and more than 160 articles on finance, accounting, and economics. He is also the creator of the Altman Z-Score, developed originally as a means of predicting bankruptcy probabilities. McKinsey researchers successfully used the Z-Score to test … [ Read more ]

Content: Thought Leader | Author: Edward I. Altman | Source: McKinsey Quarterly | Subjects: Economics, Finance