AIHR

JANUARY 11, 2023

Labor costs like salaries, benefits, and related taxes make up as much as 70% of total operating costs of a business. For example, when a company pays a wage for a service rendered, the amount is recorded in the wages payable account of the balance sheet. It refers to the outflow of cash in return for incoming goods or services.

Cash Flow 136

Cash Flow Balance Sheet Assets Revenue 136

Harvard Business Review

APRIL 9, 2015

But before anyone writes a check, you need to calculate the return on investment (ROI) by comparing the expected benefits with the costs. Analyzing ROI isn’t always as simple as it sounds and there’s one mistake that many managers make: confusing cash and profit. But profit is not cash flow.

ROI 15

ROI Cash Flow Revenue Balance Sheet 15

Harvard Business Review

FEBRUARY 24, 2011

Buffett explains that book value is the best proxy for "intrinsic value," the net present value of all estimated future cash flows. Gain accounting advantage : Buffett reports on the performance of his operating businesses by grouping them according to similar balance sheet and income statement characteristics.

Balance Sheet 15

Balance Sheet Cash Flow Insurance Benchmarking 15

Harvard Business Review

NOVEMBER 1, 2011

They would see massive profits, tons of free cash flow, and healthy balance sheets. want people to focus on cash flow, which is a much longer-term measure than short-term profit.". Since they wouldn't know that the companies had set and missed growth targets, they'd declare them very successful.

Cash Flow 11

Cash Flow Balance Sheet Operations Benefits 11

Harvard Business Review

MAY 28, 2018

While companies are required to share the same materials with all investors, they can emphasize the elements that will be most relevant to particular investor segments—highlighting stable cash flow for pension funds or payouts for growth-oriented investors, for example.

Balance Sheet 12

Balance Sheet Cash Flow Banking Fixed Costs 12

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. Shareholders don’t care about fans or followers unless those numbers can be tied to profit.

Benchmarking 9

Benchmarking Metrics Advertising ROI 9

Harvard Business Review

FEBRUARY 22, 2012

can benefit consumers and the economy with lower cost (although foreign operations often sell in foreign markets). The cash from high revenues and margins is also often used to enhance the corporation: for improving its operations, productivity, technology and products, or for increasing reach and scale efficiencies through acquisitions.

Balance Sheet 15

Balance Sheet Cash Flow Revenue Government 15