Harvard Business Review

APRIL 4, 2016

There are people who disagree with that adage, of course, some saying that cash and cash flow are more important (and too often ignored). There are several ratios you can look at that will help you evaluate whether your company can generate sales and control its expenses. Let’s start with return on assets.

Assets 14

Assets Balance Sheet Cash Flow Banking 14

Harvard Business Review

APRIL 9, 2015

Income statements almost always include an allowance for depreciation of capital assets. Cash transactions, meanwhile, show up on the cash flow statement. A common mistake in ROI analysis is comparing the initial investment, which is always in cash, with returns as measured by profit or (in some cases) revenue.

ROI 15

ROI Cash Flow Revenue Balance Sheet 15

Harvard Business Review

MARCH 21, 2013

Return on equity (net income divided by equity) results from multiplying three key operating ratios: Profitability (net income over sales). Operating efficiency (sales over assets). Financial leverage (assets over equity). So it began disaggregating return on equity into three components.

Cash Flow 17

Cash Flow Assets Benchmarking Sales 17

Harvard Business Review

JUNE 1, 2011

In writing down your value proposition "answer," think about the unique capabilities and assets that your business has that clearly differentiates it from the competition. That is a unique process and asset in the nail salon world. What do you have that is different and appealing to the customer? Who are you trying to serve?

Cash Flow 17

Cash Flow Metrics Assets Sales 17

Harvard Business Review

OCTOBER 9, 2012

The statistics that companies use most often to track and communicate performance include financial measures such as sales and earnings per share growth. The three commonly cited financial drivers of value creation are sales, costs, and investments. They had been measuring the wrong thing, and executives may be making the same mistake.

Banking 17

Banking Cash Flow Metrics Government 17

Harvard Business Review

NOVEMBER 30, 2018

Car sales in the U.S. But car sales are now probably past a cyclical peak, not only in the U.S. It’s important because companies build assets and capabilities to deliver products and services to a market of consumers that values them at some point in time. Then there is the question of how to reallocate assets.

Fixed Costs 14

Fixed Costs Assets Cash Flow Variable Costs 14

Harvard Business Review

FEBRUARY 19, 2011

You can avoid this issue entirely by investing cannily in assets with long-term value and, thus, extremely long hold periods. Buy things with sound cash flow and — theoretically — "hold-forever" potential. Do you need to sell? Can you take some chips off the table while staying in the game?

Cash Flow 16

Cash Flow Assets Sales Sales 16

Harvard Business Review

OCTOBER 15, 2014

Through a raft of acquisitions and divestments since the early 1990s, it has transformed into a focused world-leading coatings manufacturer with $15 billion in sales. Since 1995, when glass and coatings each accounted for about 40% of sales, the split has evolved to 93% coatings and 7% glass today.

Cash Flow 14

Cash Flow Revenue Sales Sales 14

Harvard Business Review

JUNE 26, 2015

When retailers liquidate stores, managers must quickly make a series of decisions, since the duration of a liquidation sale is limited by law to 60 or 90 days in many jurisdictions. Because of the security provided by inventory, these loans do not carry the financial covenants and investment limitations of cash-flow loans.

Cash Flow 12

Cash Flow Revenue Banking Operations 12

Harvard Business Review

OCTOBER 28, 2016

Combining the second-largest wireless carrier with the fourth-biggest entertainment company — one whose impressive assets include HBO and CNN — is likely to create an unassailable mobile-entertainment business. You gain market power, allowing you to price the asset higher than you could otherwise. But they’re wrong.

Assets 13

Assets Cash Flow Media Advertising 13

Harvard Business Review

NOVEMBER 24, 2015

It is big in terms of the total corporate assets that are being re-assigned to new owners. Alternatively, if I sell my car to an Uber driver, or the owner of a taxi medallion, that same asset may be put to a different use and become more valuable to customers or society. The last common source of joint value is future options.

Scaling 12

Scaling Cash Flow Assets Benefits 12

Harvard Business Review

MARCH 21, 2013

Return on equity (net income divided by equity) results from multiplying three key operating ratios: Profitability (net income over sales). Operating efficiency (sales over assets). Financial leverage (assets over equity). So it began disaggregating return on equity into three components.

Cash Flow 10

Cash Flow Assets Benchmarking Sales 10

Harvard Business Review

JUNE 18, 2015

For instance, despite the prominent role that discounted cash flow valuation methods play in academic finance courses, few PE investors use discounted cash flow or net present value techniques to evaluate investments. Rather, they rely on internal rates of return and multiples of invested capital.

Cash Flow 14

Cash Flow Engineering Government Operations 14

Harvard Business Review

JUNE 4, 2014

That is, rather than employ a new technology to disrupt a company’s business model, an upstart disrupts the entire breadth of an entrenched value chain by wresting control of a critical asset. But the critical asset in that value chain is the viewership data that Nielsen provides, which sets the price for advertising. for three years.

Assets 11

Assets Advertising Cash Flow Revenue 11

Harvard Business Review

OCTOBER 21, 2016

Disruptions in the supply chain may affect production processes that depend on unpriced natural capital assets such as biodiversity, groundwater, clean air, and climate. “Stranded assets” are investments that become obsolete due to regulatory, environmental, or market constraints. billion in mining projects since 2010.

Assets 15

Assets Operations Revenue Energy 15

Harvard Business Review

MARCH 31, 2015

The company later announced loss in sales, but this has been tied more to a pattern of low profits in the last few years since the company’s merging with Kmart, than to the October data breach. The Sears stock price steadily rose during the month after the announcement. In the beginning of October, 2014, the largest U.S.

Balance Sheet 13

Balance Sheet Cash Flow Banking Assets 13

Harvard Business Review

DECEMBER 17, 2010

For example, "You don't earn your quota just by making the sale," says Daniels. In those cases, what if the salesman made the sale but the client never ordered from him again? You don't want to reward the sale if it was done at the cost of efficiency or in conflict with your organization's values. Avoid using a single metric.

Compensation 16

Compensation Metrics Cash Flow Sales 16

Chris LoCutro

APRIL 23, 2024

You know what, if it's a, we look at an opportunity for, maybe there's something inside of the business that is an asset that we're not needing anymore, we could sell that off. If there's other options like assets or things, great, there's a ton of different ways. Could you do a scale of payouts? We can transition some of that money.

Small Business 40

Small Business Succession Planning Operations Assets 40

Chris LoCutro

MARCH 5, 2024

And you're looking at the p&l all the time, you're looking at cash flow all the time, you're looking at sales projections all the time, you're looking at expense reports all the time. So let's say you've got a sales leader, and a marketing leader, and then an operations leader, or a service manager? Or do we come?

Small Business 59

Small Business Operations Accounts Energy 59

Harvard Business Review

JULY 25, 2017

It’s about “delivering customers and sales.” To do this, you need to establish your sales baseline. What would our sales and profits have been if we didn’t spend on this marketing program? But even that can be complex, she says: “Last year’s sales line had a bunch of marketing behind it.

ROI 8

ROI Marketing Cash Flow Sales 8

Harvard Business Review

JULY 17, 2018

Since Immelt’s departure, GE’s stock is down another 30%, as its new CEO, John Flannery, has struggled to cope with the cash flow drain from years of problematic acquisitions, divestitures, and buybacks. Because of these dubious decisions, GE’s ratio of debt to earnings has soared from 1.5 in 2013 to 3.7

Cash Flow 8

Cash Flow Revenue Accounts Sales 8

Harvard Business Review

NOVEMBER 25, 2013

CMOs must demonstrate and track marketing’s impact by focusing on key performance indicators (KPIs) that are important for shareholder value such as strong cash flow, cost of capital, return on capital, and operating margin. As a long-term asset of significant value, the brand should be part of those calculations.

Benchmarking 9

Benchmarking Metrics Advertising ROI 9

Harvard Business Review

AUGUST 18, 2014

Fortunately for Szaky, he had already laid the groundwork of financing from suppliers, equity investors and others to allow them to double sales in two months. When you are a startup, there is relatively little to lose, mistakes are fixable, and a small amount of cash and a cohort of committed colleagues can go a long way.

Scaling 8

Scaling Cash Flow Banking Sales 8

Harvard Business Review

AUGUST 3, 2018

For example, ostensibly, Facebook’s customers are its daily users (call them “asset units” for argument’s sake). Those outlays could be on soft avenues, such as customer acquisition, data breach and safety, regulatory fines, and product enhancement, or on hard assets, such as hardware, servers, and cellphone towers.

Variable Costs 8

Variable Costs Revenue Assets Accounts 8

Harvard Business Review

APRIL 10, 2013

I met Slovenian entrepreneur, Sandi Cesko, in 2007 when his Ljubljana -based multi-channel retail operation, Studio Moderna , had about $70 million in sales. I met him again two months ago: six years later he had scaled up by a factor of ten — all the result of organic growth — and employs over 6000 people. Even better.

Balance Sheet 10

Balance Sheet Government Scaling Cash Flow 10

Zenefits

JULY 27, 2022

As your small business continues to scale, cash flow transparency and accounting efficiency become harder to maintain. Poor cash flow visibility. But for medium-sized businesses continuing to expand, or if you deal with complex supply chains, warehouses, sales, and manufacturers, you might need an ERP.

Accounts 52

Accounts Accounts Payable Cash Flow Software 52

Chief Executive

NOVEMBER 23, 2022

Because their modeling failed to account for changing customer behavior, retailers like Target struggled to move excess inventory causing them to rely on premature holiday sales to clear shelves ahead of the 2022 gifting season. The data will tell you what to put on the back burner. Democratize Data to Solve Problems.

SaaS 98

SaaS Cash Flow Revenue Advertising 98

Harvard Business Review

JUNE 10, 2015

The basic point was that online advertising was too small, and that transaction sizes were too insignificant to be anything other than a step down for companies used to rich cash flows. Zooming in on the sales challenge helps to highlight the difficulty of business model innovation. Unfortunately, it’s not that simple.

Media 13

Media Advertising Balance Sheet Cash Flow 13

Chris LoCutro

NOVEMBER 12, 2024

I also explain how to avoid common pitfalls, such as mismanaging surplus funds or underestimating seasonal cash flow needs. Acquisitions: Physical and Human Resources (00:31:00) Why understanding your business needs versus wants is crucial when evaluating new hires or assets. You know, what are the assets?

Assets 59

Assets Revenue Cash Flow Balance Sheet 59

Chief Executive

JANUARY 31, 2023

We’re using previous sales as an input to do a better job of predicting quantities at any given time so that our accuracy cuts down on food waste. Starting with all the assets we have today, how would you now design your team and processes and responsibilities from scratch? First is our ordering processes in the store.

Cash Flow 97

Cash Flow Software Travel ROI 97

Harvard Business Review

MAY 1, 2017

The Brady-Ryan plan is based on a “destination-based cash flow tax” (DBCFT) that is also mistakenly labeled a “border-adjustment tax” and has five critical features: A reduced rate, down to 20%. That plan has dominated tax reform dialogue for the last six months, and unfortunately so.

Cash Flow 8

Cash Flow Administration Revenue Small Business 8