The Investor’s Perspective

The “Big Five” Numbers and Shareholder Value

As we’ve mentioned before, we wrote this book for people who work in organizations, not for investors. But the investor’s perspective always informs managerial decisions, because every company must do its best to keep shareholders and bondholders happy. Even the owners and employees of privately held companies can benefit from understanding this perspective, since it provides some good indicators of the financial health of their company. So this chapter addresses the question: which ratios and other indicators does the typical investor or bondholder care most about?

In our view, Wall Street and other outside investors are really looking at five key metrics when they assess ...

Get Harvard Business Review Leadership & Strategy Boxed Set (5 Books) now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.