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When used as a strategic planning tool, decision analysis can help managers address issues such as how to allocate resources to ensure that the project meets specific deadlines, when to scale up or delay investments, and when to exit a project.

Content: Article | Author: Fabian D’Souza | Source: Harvard Business School (HBS) Working Knowledge | Subjects: Finance, Management

European stock exchanges may be aggressively marketing to foreign firms. But U.S. companies need a good business reason to list overseas.

Content: Article | Author: Alix Nyberg Stuart | Source: CFO Publishing | Subjects: Finance, International

Paying with stock is a strong signal that not only do you think your shares are overvalued but that you are not totally confident about the success of the deal.

Content: Quotation | Source: BusinessWeek | Subjects: Finance, Mergers & Acquisitions

A new CFO survey suggests why new rules for auditors may be a wise idea.

Content: Article | Author: Andrew Osterland | Source: CFO Publishing | Subjects: Accounting, Finance

Properly analyzing a business investment requires a valuation tool that can measure the unique characteristics of the opportunity and evaluate the resulting information in terms of the current financial markets, says Silicon Valley’s Amram. To achieve that goal she offers three tools for measuring value – Discounted Cash Flow, Real Options, and Decision Analysis – and “valuation templates” that allow the tools to be customized … [ Read more ]

Content: Book | Author: Martha Amram | Subjects: Finance, Strategy

Great Eastern Toys dolled up its management plan in 1996, to focus on expanding sales. Its plan, however, didn’t face up to the potential problem of working with other currencies, which is was forced to do in 1998. Its banker pointed out that the depreciation of the European currencies during the previous two years had resulted in substantial lost income. Although this is a ficticious … [ Read more ]

Content: Case Study | Authors: Gabriel Hawawini, Lee Remmers | Source: INSEAD | Subjects: Finance, International | Company: Great Eastern Toys

How do you value an Internet company? With stormy weather now rocking the Internet world, dot-com investments are no longer the watertight bets they used to be. It now makes sense to forecast the value of the company you are thinking of investing in. Jean Dermine, INSEAD Professor of Banking and Finance and INSEAD MBA alumni K. Wildberger and H. Georgeson use this case study … [ Read more ]

Content: Case Study | Authors: H. Georgeson, Jean Dermine, K. Wildberger | Source: INSEAD | Subject: Finance | Industry: Investment Banking | Company: Egg

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Executive compensation practices won’t change until accounting rules for options are fixed.

Content: Article | Author: Andrew Osterland | Source: CFO Publishing | Subjects: Corporate Governance, Finance

As nervous investors flee from companies with even a hint of murky accounting, the pressure is on CFOs to rein in pro forma reporting, renounce off-balance-sheet maneuvers, and disclose more information. But a new survey on financial reporting by CFO Magazine suggests that many finance execs are unwilling to change their ways, even in the wake of Enron and WorldCom.

Content: Article | Author: Ronald Fink | Source: CFO Publishing | Subjects: Accounting, Finance

Most of finance is built from a few standard formulas and strategies. For example, investments tend to grow like compound interest and pay out like annuities; and you judge them by estimating future profits and then calculating present values or equivalent rates of return.

So here are the basic building blocks, from the easy to the ugly.

This article uses interactive graphs to demonstrate some … [ Read more ]

Content: Online Resource | Source: moneychimp | Subject: Finance

Finance skills a little rusty? Do you find yourself reaching for that dusty finance textbook to decipher the CFO’s memos? MoneyChimp will let you brush up on your lackluster numbers knowledge and learn about concepts like modern portfolio theory and how to trace cash flow. The site offers a full toolbox of calculators covering topics such as stock and bond valuation and the time value … [ Read more ]

Content: Online Resource | Source: moneychimp | Subject: Finance

A raft of companies have recently announced plans to repurchase their stock. This may not be such a hot idea.

Content: Article | Author: Jennifer Caplan | Source: CFO Publishing | Subject: Finance

When financial pressures and capital markets demand improved financial performance, the most common reaction is a reduction in force — that’s a layoff. I’m sorry to report that many managers choose layoffs as an expedient way to improve performance and satisfy capital markets. The result for the company is half the people doing twice the work. Capital markets may see some short-term profit improvement, but … [ Read more ]

Content: Quotation | Source: Leader to Leader | Subjects: Finance, Human Resources, Management

Here is an interactive Applet that shows a snapshot of the market by sector with color coding to indicate performance. Mouse over any square to see details of the related company and it’s stock performance. View performance for the day, the past 6 or 12 months, or YTD. Click on a company square and get quick access to more detailed info including:
… [ Read more ]

Content: Online Resource | Source: SmartMoney | Subject: Finance | Industry: Investment Banking

Compared with the previous peak of global capital, the amount of money flowing to poorer countries today is already small. Maurice Obstfeld and Alan Taylor, two economists, point out that less-developed countries’ share of total global debt is at an all-time low. In 1900, these countries accounted for 33% of the total; in the 1990s, the figure was down to 11%. In 1913, the countries … [ Read more ]

Content: Article | Author: Matthew Bishop | Sources: CFO Publishing, The Economist | Subjects: Finance, International | Industry: Finance / Banking

Content: Book | Authors: Andrew Stark, David Newton, Dean Paxson, Mustafa Cavus, Sydney Howell | Subject: Finance

Josef Lakonishok says stock prices are driven by gut-wrenching emotion that smart investors can exploit. Eugene Fama says an efficient market governs prices, which means stock picking is a cruel illusion. When both invest, who does better?

Editor’s Note: See another article on this theme, ‘Is That a $100 Bill Lying on the Ground? Two Views of Market Efficiency’, at
Content: Article | Author: Seth Lubove | Source: Forbes | Subject: Finance | Industry: Investing

The 2002 Working Capital Survey (sixth annual conducted jointly with REL Consultancy Group) reveals ways to reduce working capital without punishing customers or suppliers. But the alternatives aren’t totally pain-free.

Editor’s Note: I find the 2002 Working Capital Survey Charts (last page) a very useful benchmark/CI tool.

Content: Article | Author: Tim Reason | Source: CFO Publishing | Subjects: Competitive Intelligence, Finance