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

Harvard Business

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.

Metrics 105
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Reclaiming the Idea of Shareholder Value

Harvard Business

Properly understood, maximizing shareholder value means allocating resources so as to maximize long-term cash flow. This includes non-financial and financial performance metrics as well as incentive compensation plans.

Cash Flow 123
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Is Corporate Short-Termism Really a Problem? The Jury’s Still Out

Harvard Business

It is also the case that the companies generating the highest immediate cash flows, which should be overvalued on the myopia theory, historically have had the highest stock market returns , implying undervaluation rather than overvaluation. Its findings deserve much discussion, debate, and attempts at replication.

McKinsey 122
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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business

In our recent HBR article , we argued that financial statements fail to capture the value created by modern digital companies. Business students are taught to value a company based on the discounted amounts of future cash flows or earnings. Analysts increasingly rely on non-GAAP metrics.

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Key Performance Indicators (KPIs) for Professional Services Firms

Progressus

These metrics provide the foundation for more outcome-oriented engagements, leveraging real-time data to secure contracts, monitor progress, and demonstrate the value of client investments. Which Metrics Are Essential for Professional Services Firms?

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A Blueprint for Digital Companies’ Financial Reporting

Harvard Business

In a recent HBR article , we claimed that modern digital companies such as Uber, Facebook, and Alphabet play an increasingly important role in the economy, but their financial statements fail to capture company’s main value drivers. Many of these metrics are disclosed in Facebook’s financial statements.

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Financial Shenanigans Versus Incompetence

Martinka Consulting

On August 26, 2019 the WSJ had an article about how CEO pay is often much higher than disclosed (due to stock appreciation and clauses that escalate compensation). Tip to owners – one of the top three things you can do is have solid financial systems, accurate statements, good management reports, know your KPIs, and other metrics.