Publications

Article

Short-Termism and Capital Flows

By: Jesse M. Fried and Charles C.Y. Wang

During 2007–2016, S&P 500 firms distributed to shareholders $7 trillion via buybacks and dividends, over 96% of their aggregate net income, prompting claims that "short-termism" is impairing firms' ability to invest and innovate. We show that, when taking into account... View Details

Keywords: Short-termism; Quarterly Capitalism; Share Buybacks; Open Market Repurchases; Dividends; Equity Issuances; Seasoned Equity Offerings; Equity Compensastion; Acquisitions; Payout Policy; Capital Flows; Capital Distribution; Working Capital; Business and Shareholder Relations; Acquisition

December 1989
Article

The Equilibrium Valuation of Risky Discrete Cash Flows in Continuous Time

By: David C. Shimko

February 2013 (Revised February 2013)
Case

King Abdullah Economic City in 2009: Population Drivers and Cash Flow

By: John D. Macomber

CEO of high profile new economic city in Saudi Arabia must decide how to allocate limited investment funds across projects under duress. Issues include understanding core economic drivers, planning infrastructure investment and return, attracting multinationals, energy... View Details

Keywords: Urban Development; Infrastructure; Real Estate Industry; Saudi Arabia

June 2005 (Revised November 2006)
Background Note

Valuation Methods and Discount Rate Issues: A Comprehensive Example

By: Marc L. Bertoneche and Fausto Federicic

Presents a comprehensive review of the valuation methods based on discounting cash flows or value creation metrics and shows, through simple example and a straightforward "how-to-do" framework, the perfect consistency and identity of their results under similar... View Details

Keywords: Valuation

May 1998
Article

Note, Using Capital Cash Flows to Value Dissenters' Shares in Appraisal Proceedings

By: Guhan Subramanian

Keywords: Capital; Cash Flow; Value; Ownership

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May 2001 (Revised February 2007)
Background Note

Statement of Cash Flows, The

By: David F. Hawkins and Jacob Cohen

Discusses the components of the statement of cash flow and its direct and indirect format of presentation. Also briefly explains the difference between cash and accrual accounting and provides examples of Standard Microsystems Corp. and Intel Corp. View Details

Keywords: Cash Flow; Financial Statements; Accrual Accounting

December 1998
Background Note

Cash Management Practices in Small Companies

By: H. Kent Bowen, Andrew R. Jassy, Laurence E. Katz, Kevin E. Kelly and Baltej Kochar

Most small business managers claim that cash management is their leading concern. Often walking a tightrope between growth and illiquidity, small business managers face different cash management challenges than their counterparts in larger companies. Compared to larger... View Details

Keywords: Motivation and Incentives; Working Capital; Management Practices and Processes; Organizational Design; Cash; Forecasting and Prediction; Policy; Business Strategy

24 Apr 2014
News

Cash flow struggles can take down a company or spark ideas that transform an industry

Plans that Jonathan Bush (MBA 1997) had for an obstetrics practice ran into trouble when faced with unpaid claims and problems tracking patient records. In that, Bush saw an opportunity that forever changed the health records services industry. Record-keeping... View Details

02 Nov 2016
Op-Ed

Government and Financial Tech Can Fix Cash Woes for Small Businesses

Ask any small business owner and they will tell you that cash flow is on their mind pretty much all the time. This isn’t surprising, given that they are continuously managing dollars coming in from customers... View Details

Keywords: by Karen Mills

November 2012
Exercise

Coca-Cola: Residual Income Valuation Exercise

By: Suraj Srinivasan

The exercise illustrates the use of the residual income (also known as the abnormal earnings) valuation approach. Students are asked to provide a valuation of Coca-Cola Company using the residual income valuation methodology and understand how it maps into the... View Details

Keywords: Business Analysis; Valuation; Residual Income Valuation; Accounting; Financial Accounting; Financial Analysis; Financial Statement Analysis; Financial Statements; Discounted Cash Flows

September 2016 (Revised February 2017)
Case

MyTime

By: Juliane Begenau and Robin Greenwood

Ethan Anderson, the CEO of San Francisco–based e-commerce company MyTime, must decide on the company's growth strategy. MyTime’s first product was a website and mobile app that offered consumers a convenient way to book appointments with local merchants throughout the... View Details

Keywords: Customer Valuation; Discounted Cash Flow; Software; Valuation Methodologies; Subscriber Models; Financial Management; Corporate Finance; Growth and Development Strategy; Valuation; Applications and Software; Information Technology Industry; North and Central America

27 Apr 2017
News

Going with the Flow

“Where’s your cash register? I don’t hear the cash register ringing.” Cynthia Fisher (MBA 1990) still recalls the first words her father, a small-town accountant, uttered when he visited ViaCord’s startup... View Details

11 May 2017
News

Going with the Flow

cash flow. “My father had a CPA firm and occasionally acted as an angel investor,” she says. “In all, he helped start 30 different businesses in our area. He occasionally brought my sisters and me into the businesses as a learning... View Details

Keywords: Robert S. Benchley

May 2007
Article

Capital Flows and Capital Goods

By: Laura Alfaro and Eliza Hammel

Studying the relation between equity market liberalization and imports of capital goods, we examine one channel through which international financial integration can promote growth. For the period 1980–1997, we find that after controlling for other policies and... View Details

Keywords: Cash Flow; Equity; Financial Markets; Economy; Distribution Channels; Machinery and Machining; Capital

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September 2012
Teaching Note

Stryker Corporation: Capital Budgeting (TN)

By: Timothy A. Luehrman

This case examines some parts of Stryker Corporation's systems and procedures for approving and authorizing capital spending of many different types, including buildings, machinery, and working capital for existing businesses, as well as transactions with third parties... View Details

Keywords: Capital Expenditures-equipment; Capital Expenditures-machinery; Internal Rate Of Return; Discounted Cash Flows; Net Present Value; Cost of Capital; Valuation; Cash Flow; System; Organizational Culture; Policy; Business Processes; Capital Budgeting

January 2018
Case

OldTown Berhad

By: Benjamin C. Esty and Greg Saldutte

In December 2017, Jacobs Douwe Egberts (JDE, a Dutch coffee company) made an offer to acquire OldTown Berhad (OTB), a Malaysian coffee company. Three large shareholders, representing more than half of the outstanding shares, have agreed to tender their shares, and... View Details

June 2014 (Revised October 2015)
Case

Molycorp: Financing the Production of Rare Earth Minerals (A)

By: Benjamin C. Esty and E. Scott Mayfield

Molycorp, the western hemisphere's only producer of rare earth minerals, was in the middle of a $1 billion capital expenditure project in its effort to become a vertically integrated supplier of rare earth minerals, oxides, and metals. Yet it had just reported lower... View Details

26 Aug 2009
Op-Ed

Where Cash for Clunkers Ran Off the Road

Editor's Note: Harvard Business School professor John Quelch writes a blog on marketing issues, called Marketing Know: How, for Harvard Business Online. It is reprinted on HBS Working Knowledge. Today, let us celebrate the end of an unjustifiable drain on the U.S.... View Details

Keywords: by John Quelch; Auto

October 2015
Teaching Note

Molycorp: Financing the Production of Rare Earth Minerals (A)

By: Benjamin C. Esty and E. Scott Mayfield

Molycorp, the western hemisphere's only producer of rare earth minerals, was in the middle of a $1 billion capital expenditure project in its effort to become a vertically integrated supplier of rare earth minerals, oxides, and metals. Yet it had just reported lower... View Details