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A Refresher on Return on Assets and Return on Equity

Harvard Business Review

Let’s start with return on assets. What is Return on Assets (ROA)? ” You’re taking everything you own in the business — any assets like cash, facilities, machinery, equipment, vehicles, inventory, etc. “ROA simply shows how effective your company is at using those assets to generate profit.”

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The Data Says Climate Change Could Cost Investors Trillions

Harvard Business Review

But this new report, by estimating the risk to all financial assets and portfolios, finds a powerful middle ground that should get investor attention. Last year, Citi produced a powerful study of the costs and benefits of shifting the energy system toward low-carbon technologies. And thus those companies are massively overvalued.

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Dow Asks, What's the Business Case for Protecting Nature?

Harvard Business Review

Companies are increasingly seeing the obvious benefits of slashing energy use, and beginning to include in their calculations the considerable risk reduction from managing water well or limiting the use of toxic chemicals. Or in business terms, we're drawing down the assets on the balance sheet of the world.

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A New Way to Think About Office Lighting

Harvard Business Review

Most offices have adequate but aging lighting systems that often operate inefficiently, can waste vast amounts of energy, and annoy employees. We believe that a recent business-model innovation will overcome this barrier and upend commercial lighting and other energy services. Hence the opportunity for third-party service providers.

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How Share-Price Fixation Killed Enron

Harvard Business Review

The company also had three divisions — Water, International, and Merchant Investment — that were saddled with underperforming and over-valued assets. Enron was rated BBB+ (or the equivalent) by all three rating agencies, which typically include all off balance sheet debt when determining a rating.

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Oil’s Boom-and-Bust Cycle May Be Over. Here’s Why

Harvard Business Review

In November, United States’ crude oil production exceeded 10 million barrels per day for the first time since 1970, according to the US Energy Information Administration (EIA). The recent price swings highlight a new era of uncertainty gripping the world’s energy markets. hbr staff/bettmann/Getty Images.

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Stop Focusing on Profitability and Go for Growth

Harvard Business Review

Bain & Company’s Macro Trends Group carefully analyzed the global balance sheet and found that the world is awash in money. Global capital balances more than doubled between 1990 and 2010 — from $220 trillion (about 6.5 Yet the same crisis ushered in a new age of capital superabundance. times global GDP).