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High Expectations: Managing For Value In The Automotive Industry

Chief Executive

Since shareholder value is driven by investor expectations of future cash flow and EP growth (See S&P 500 Warranted Value of Discounted Economic Profits vs. Actual Traded Value chart, below), EP has been used as the profitability metric for AlixPartners’ Automotive Value Creation study.

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There Is A Roadmap Through Today’s Financial Crunch

Chief Executive

Here’s the gist of Charan’s recommendations: • Remember that cash is king. Manage your business “on the basis of cash, not on the basis of accounting,” Charan said, reminding his audience that Jeff Bezos built Amazon into a multi-billion-dollar company partly by putting cash on the throne of his operating philosophy. “Get

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Customizable profit and loss template for SMBs

Monday Task Management

A basic break-even analysis template should include customizable fields where you can input all the variable costs of your new venture — including fixed costs, price, volume, and other factors that could ultimately affect your net profit. This helps you figure out when you’ll break even. Image Source ). Unlimited automations.

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3D Printing Will Revive Conglomerates

Harvard Business Review

Hailed in the 1960s as bastions of sophisticated management, they used cheap financing to acquire, then rationalize, many family-owned firms. That gave it a steadier cash flow to cover the costs of its large fixed cost investments, but did not eliminate the unused capacity of plants dedicated to one kind of product.

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We Can’t Study Short-Termism Without the Right Metrics

Harvard Business Review

Similarly, considering greater accruals (which represent the difference between reported income and operating cash flows) to measure short-term orientation has its difficulties. It assumes that a smaller proportion of cash flows in earnings indicates a myopic firm.

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How Companies Can Use Investors to Their Advantage

Harvard Business Review

Nikon, the legendary Japanese camera maker, provides a textbook study in how smart managers can work with strategic investors to transform a struggling business. It also called for streamlining headquarters and cutting executive management’s compensation. Heini Wehrle/BIA/Minden Pictures/Getty Images.

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The Challenges GM Is Facing, and the Reasoning Behind Its Plant Closures

Harvard Business Review

Capital-intensive factories have a high-fixed-cost, low-variable-cost operating model. If you greatly reduce the production volume, the cars that do come out have to absorb more of the fixed costs, and that eventually sends the product into a profitability death spiral. Given the shift in immediate U.S.