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How Incentives for Long-Term Management Backfire

Harvard Business

This is a classic story of unintended consequences — inadvertently short-circuiting long-term management — to the detriment of companies, investors, and the economy. Another company, in the agricultural technology sector, chose free cash flow as the primary long-term incentive measure.

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Which MBAs Make More: Consultants or Small-Business Owners?

Harvard Business

Owners of small businesses can set their own hours, make their own management decisions, and take pride in the ownership of their work. The value of that carried interest, of course, depends on the performance of the business, its size, amount of debt used to finance the acquisition and the eventual pricing of a subsequent sale.

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A Refresher on Marketing ROI

Harvard Business

While MROI is not usually public information, managers can use published financial statement data to estimate MROI for a competitor. It’s about “delivering customers and sales.” That challenge, however, pales in comparison with the difficulty of measuring incremental financial value.

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Shockingly Bad Fiscal Health of Chicago (and the Financial Engineering Chicago Uses to Hide that Fact)

MishTalk

Among other things, she handles the structuring and sale of bonds for schools across the state. Although most governments are required to balance their budgets on a cash flow basis each fiscal year, a structural budget gap can arise when recurring expenditures are greater than recurring revenues.