Financial analysis

Risk heat maps can miss critical weaknesses.

Is the diversity created by mass migration a good thing for economic growth? To find out, a pair of researchers mobilized a large-scale dataset on international...

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, […]

The key challenge for companies will be deciding how to use it.

In recent years, the leaders of American companies have been barraged with attacks on their investment policies. Critics accuse American executives of shortsightedness and point out that managers in Japan and Europe often fix their vision on more distant horizons. Here, it is claimed, managers pay too much attention to quarterly earnings reports and not […]

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? […]

Valuation used to be the province of finance specialists. That’s no longer true.

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 […]

The economy needs careful decision-makers as well as risk-takers.

Too often, companies do a poor job of making innovation transparent to investors.

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

When service companies put employees and customers first, a radical shift occurs in the way they manage and measure success.

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

But it’s the best way to create value.

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 […]

“Financial theory, properly applied, is critical to managing in an increasingly complex and risky business climate.”

Healthy companies balance their sources of funding.

Our era of superabundant capital rewards the latter.

Most companies aren't half as innovative as their senior executives want them to be (or as their marketing claims suggest they are). What's stifling innovation?...

And when those innovations succeed.