1173 Posts Found

Using price analytics could help companies in many industries do a better job of understanding the profitability of specific products and services. One cornerstone is ensuring the transparency of all associated costs. Price analytics also addresses areas such as organizational structure, business processes, customer segments and product characteristics.

Content: Article | Authors: David A. J. Axson, Kurt Rosander | Source: Accenture | Subjects: Finance, Management, Pricing

Most people know that money you have in hand now is more valuable than money you collect later on. That’s because you can use it to make more money by running a business, or buying something now and selling it later for more, or simply putting it in the bank and earning interest. Future money is also less valuable because inflation erodes its buying power. … [ Read more ]

Content: Article | Author: Amy Gallo | Source: Harvard Business Review | Subject: Finance

A new study indicates that companies with strong core HR practices have revenue growth that is up to 3.5 times higher than that of their peers and profit margins that are 2.1 times better. The study looked at 22 HR areas and focuses on just six with the greatest tie between economic performance and a company’s capability. These areas are recruiting, on-boarding of new hires … [ Read more ]

Content: Article | Author: Joanne Sammer | Source: Business Finance Magazine | Subjects: Finance, Human Resources

“What reasons are valid to change a budget?” It’s a question I often get. Here’s my response that provides ten quick reasons to change a budget.

Content: Article | Author: Steve Player | Source: Business Finance Magazine | Subject: Finance

The moment you make a mistake in pricing, you’re eating into your reputation or your profits.

Content: Quotation | Subjects: Finance, Management, Marketing / Sales

“Innovation is for CFOs, too,” say IESE’s Tony Davila and co-authors of this article identifying six levers of innovation applicable to any field.

Content: Article | Author: Tony Davila | Source: IESE Insight | Subjects: Finance, Innovation

When I speak with managers about profit generation, one of the most frequent topics that come up are the pitfalls and logic traps that lead to major profitability drains. Here are the biggest offenders:

Contribution – Why shouldn’t we take business that contributes to overhead, even if it doesn’t cover full cost?
Product line – Why shouldn’t we carry products that lose money if they are … [ Read more ]

Content: Article | Author: Jonathan Byrnes | Source: Business Finance Magazine | Subjects: Finance, Management

Controlling costs has become a necessity for every business in these difficult and uncertain times. But taking costs out of an organization carries significant risks as well as opportunities. How companies approach cost reductions now will help determine their financial health and competitive position when the recovery takes hold.

In this paper, Monitor’s Josh Lee and Karin Stawarky discuss how adaptive cost management empowers business leaders … [ Read more ]

Content: Article | Authors: Josh Lee, Karin Stawarky | Source: Monitor Group | Subjects: Finance, Management

The bedrock of the traditional management process is multi-year strategic plans, static annual budgets, quarterly forecasts, monthly reports, and—most dangerous of all—a compensation philosophy that’s as likely to reward failure as it is success. We need a new manifesto for business performance management, one that recognizes that volatility, uncertainty and risk are here to stay. And we must implement behaviors, processes, and systems that allow … [ Read more ]

Content: Article | Author: David A. J. Axson | Source: Business Finance Magazine | Subjects: Finance, Management

Top financial managers have an opportunity to boost their companies’ profits to new heights. The key to success: become your company’s Chief Profitability Officer. How can a CPO reverse his or her company’s massive embedded unprofitability and generate new streams of profits? Three essential steps: develop a profit map; define priorities and serving models for your important account/product segments; and align compensation throughout your company, … [ Read more ]

Content: Article | Author: Jonathan Byrnes | Source: Business Finance Magazine | Subjects: Finance, Management

A handful of pragmatic tools can help managers decide which projects best fit their portfolio and risk tolerance.

Content: Article | Authors: Anders Rasmussen, Martin Pergler | Source: McKinsey Quarterly | Subjects: Finance, Management, Project Management

The business case process is seriously flawed in all too many companies. This is a very important issue, because evaluating business cases is one of the core processes for allocating capital to move the company forward. How can such a logical process be misused? This typically occurs in six areas.

Content: Article | Author: Jonathan Byrnes | Source: Business Finance Magazine | Subjects: Finance, Management

Many managers have as their primary occupation to make something else: numbers. To make the right numbers—that is, turning in a specified financial performance over a specified period of time—they give directions to hire and fire people, expand or contract capacity, raise or lower prices. At one level, the desire to make the numbers is entirely rational. If we look deeper, however, it might not … [ Read more ]

Content: Article | Authors: M Stulz, Michael E. Raynor | Source: The Conference Board Review | Subjects: Finance, Management

The four cornerstones of corporate finance start with the axiom that companies exist to meet customer needs in a way that translates into reliable returns to investors. Together, the cornerstones form a foundation upon which executives can ground decisions about strategy, M&A, budgets, financial policy, technology, and performance measurement—even as markets, economies, and industries change around them.

Content: Article | Authors: Bill Huyett, Richard Dobbs, Tim Koller | Source: Business Finance Magazine | Subject: Finance

Consider some of the business disciplines that are often held above reproach: revenues are good, costs are bad; give the customer what they want; don’t mess with a good thing; and supply chain integration is always a benefit. Those beliefs have passed their expiration, according to Jonathan Byrnes, a consultant and senior lecturer at MIT. According to Byrnes, some of those disciplines are merely myths … [ Read more ]

Content: Article | Authors: Jonathan Byrnes, Peter Alpern | Source: Business Finance Magazine | Subjects: Finance, Management

If your firm has gotten used to using the Black-Scholes Options Price Model (BSOPM) when valuing options and other derivatives, you may want to rethink your practice. The reason? The BSOPM may not be entirely accurate when pricing derivatives that are other than “plain vanilla.”

Content: Article | Author: Karen M. Kroll | Source: Business Finance Magazine | Subject: Finance

Financial decision theory has attempted to put finance forward, with some success, as a meta-decision framework for organizations, encompassing alternative financing and debt/equity trade-offs (Capital Asset Pricing Model), shareholder value added (hurdle rates, risk-adjusted return on capital), time cost of money (Net Present Value) and volatility (risk/reward options). Finance provides a single ‘currency’ for corporate decisions. Can this financial model be reconciled with social responsibility … [ Read more ]

Content: Quotation | Author: Michael Mainelli | Source: European Business Forum (EBF) | Subjects: Finance, Social Responsibility (ESG)

To get your forecasts back in gear, IBM suggests avoiding seven sins that undermine your efforts.

Content: Article | Author: Alan Radding | Source: Business Finance Magazine | Subjects: Finance, Management

Forget ROE or EBITDA—and meet COROA, or “cash operating return on assets.”

Content: Article | Author: Shawn Tully | Source: FORTUNE | Subjects: Accounting, Finance

In previous articles, the authors established the importance of retaining a differentiated, nonprice position in the market. Exceptional companies face a trade-off between increasing ROA through return on sales (ROS) or through total asset turnover (TAT), and the best performers systematically choose higher ROS. We now focus on the primary driver of superior profitability, ROS, and on its determinants: revenue and cost.

Content: Article | Authors: Mark Cotteleer, Michael E. Raynor, Mumtaz Ahmed | Source: Deloitte Review | Subjects: Finance, Management