Financial analysis

What you measure is what you get. Senior executives understand that their organization’s measurement system strongly affects the behavior of managers and employees. Executives also understand that traditional financial accounting measures like return-on-investment and earnings-per-share can give misleading signals for continuous improvement and innovation—activities today’s competitive environment demands. The traditional financial performance measures worked well […]

What every manager ought to know about the different kinds of forecasting and the times when they should be used.

Lately companies have come to recognize the limitations of the view that they must create value only for shareholders. Recognizing that every stakeholder...

What do companies like Rockwater, Apple Computer, and Advanced Micro Devices have in common? They’re using the scorecard to measure performance and set strategy.

A book on Buffett spurs Gates to reflect on their friendship.

Do you know what your most profitable product is?

The primary goal of forecasting is to identify the full range of possibilities facing a company, society, or the world at large. In this article, Saffo...

The March–April 1974 issue of HBR carried an article that reported on Phases I and II of a project sponsored by the Marketing Science Institute and the Harvard Business School. The basic purpose of the project is to determine the profit impact of market strategies (PIMS). The earlier article established a link between strategic planning […]

Less than a decade after the frantic merger activity of the late 1960s, we are again in the midst of a major wave of corporate acquisitions. In contrast to the 1960s, when acquirers were mainly freewheeling conglomerates, the merger movement in the 1970s includes such long-established giants of U.S. industry as General Electric, Gulf Oil, […]

To gain insight into solving your organization's issues, stop and look at the numbers.

It pays to be conscientious. Extroverted, not so much.

Since the rise in the use of discounted cash flow techniques, most managers face an increasingly difficult choice in evaluating complex investment decisions. Should they pursue risky projects that offer a below-target rate of return but could create valuable strategic opportunities later? Or should they stick with a less risky and more immediately profitable bet? […]

This article presents the research findings of a leading U.S. corporation, AT&T, on a series of important economic questions and issues, with an interpretation of the material by one of the company’s top executives. The subject is corporate earnings patterns in different industries, investment trends, the relation of profits and investment to GNP, and other […]

Risk heat maps can miss critical weaknesses.

The key is knowing what your top price is—and having the discipline to stick to it.

Increasingly, companies are measuring customer loyalty, employee satisfaction, and other nonfinancial areas of performance that they believe affect profitability....

Every day, at almost every company, strategy is being hijacked by numbers. Because strategy is abstract, employees often mentally replace it with the...

Today’s technology can put adjusted present value into the arsenal of every general manager.

Not long ago I asked the officer of a regional investment banking firm why the price-earnings ratio for a small publicly held company was so low. “After all,” I said, “this company has the potential to grow since it’s in the dental equipment industry. It seems to me it warrants a high ratio.” “Don’t you […]

Impact investing--directing capital to ventures that are expected to yield social and environmental benefits as well as profits--provides investors with...