Financial analysis

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

Economist Tyler Cowen argues complacency is on the rise.

A company’s stock price is the clearest measure of market expectations about its performance. Yet in a 1984 Louis Harris poll of top executives from more than 600 companies, fewer than one-third thought the market fairly valued their company’s stock. Tellingly, only 2% thought their stock was overvalued, while a dramatic 60% said the market […]

In a famous experiment, researchers ran a lottery with a twist. Half the participants were randomly assigned a lottery number. The remaining half were...

They can amount to 50-80% of customers - and consume about 40-60% of a company's costs.

You need to understand it even if it's not your job.

Despite the best efforts of senior executives, major change initiatives often fail. Those failures have at least one common root: Executives and employees...

The clear method for understanding how price reflects the market's expectations.

Why fixed prices are inefficient.

Yves Morieux, director of the BCG Institute for Organization, argues that imposing formal processes, structures, and guidelines only makes things more...

When companies buy computers for their employees, they also provide training to make sure the investment pays off. So why do those same companies invest millions of dollars in health care without making any particular effort to ensure that their employees stay healthy? As major purchasers of health care, corporations have almost as much of […]

Joe Knight, coauthor of the Financial Intelligence series, gives you a crash course in reading the numbers.

The phrase “fast growth” conjures up a picture of a high-technology company serving markets that have seemingly inexhaustible appetites for its products. Panting investors and rising stock prices are generally part of the image. A typical example of such a high-growth company is Tandy Corporation, owner of the Radio Shack chain and manufacturer of the […]

The rigor with which a problem is defined is the most important factor in finding a good solution. Many organizations, however, are not proficient at...

Few economic decisions are as difficult as those involving the choice between present and future consumption. Some people, unable to place much faith in the future, happily borrow to fund present pleasures; others, with longer time horizons, are wary of such “fly now, pay later” policies. They fear that the required payments, when viewed up […]

It's a tough metric to get right.

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 […]

Cybersecurity investments are worth more than you realize.

In this issue's Spotlight we examine how a focus on maximizing shareholder value--which leads to short-termism for management and boards--can threaten...

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