Finance flash: the TOP-10 articles of week 31, 2017
Do you want to keep up to date with the latest developments in finance, but you are short of time? Don’t worry. CFO South Africa weekly collects 10 of the most important articles from international media for your convenience.
1. How AI Will Change the Way We Make Decisions
With the recent explosion in AI, there has been the understandable concern about its potential impact on human work. Plenty of people have tried to predict which industries and jobs will be most affected, and which skills will be most in demand. (Should you learn to code? Or will AI replace coders too?)
2. Is a Higher Valuation Multiple Always Better?
Some interesting questions come to mind when discussing "valuation" multiples. We are rarely asked by management why their company is trading at a high valuation multiple. Often the concern is when they are trading at a low multiple. This might suggest that a higher valuation multiple is better, but is it? And since total shareholder return (TSR) is what matters most to investors, do valuation multiples actually matter?
3. Digital Businesses: The Metrics That Really Matter
Traditionally, executives have used standard metrics, such as cash flow, inventory turns and operating income, to get a broad sense of the health of their firm. However, the game has changed with the rise of digital business models centered on the user. New metrics need to be devised based on the core user actions that drive value creation in such models.
4. If you want my money, you'll have to answer to these four questions...
The life of an angel investor is all about managing a deal funnel, which includes three distinct steps: sourcing deals, evaluating deals, and, finally, picking which founders you're going to fund. Meeting with founders for an hour is the most frequent technique for angels to decide who to invest in, but certainly not the only one. There are some angels whose primary technique for selecting investments is to follow other smart investors, drafting off of their meetings and deal flow.
5. For a CFO, How Important Is Industry Knowledge?
In our Proformative question of the week, Wayne Spivak, president and CFO at SBAConsulting.com, writes: How important is industry knowledge to the CFO? My thesis is that all businesses are about 90% the same. They all have cash-flow issues, budgeting, products and/or services, ownership (of some type), taxes, and compliance issues ...
6. This Elon Musk Blog Post From 2006 Shows Exactly Why He's So Succes...
Musk first announced his plan to build an affordable electric vehicle in a 2006 blog post. Back then, he wasn't even CEO of Tesla. He called his post 'The Secret Tesla Motors Master Plan (just between you and me)'. "My day job is running a space transportation company called SpaceX, but on the side I am the chairman of Tesla Motors and help formulate the business and product strategy with Martin [Tesla founder Martin Eberhard] and the rest of the team," he wrote back then.
7. The Road to Finance Transformation
A CFO who can accurately report on the financial position of his or her organization with great detail and insight and on a timely basis is empowered both immediately and in the future. For today, that accurate financial snapshot clarifies competitive positioning; for tomorrow, it enables planning that is actionable, constant, and fluid.
8. Facebook May Have Just Shown What Elon Musk, Bill Gates, and Stephe...
World War II was about deception. Communications by each side were encrypted to keep the enemy in the dark about strategy and tactics. Were it not for the famous British mathematician Alan Turing, credited with building the computer that broke the German's Enigma code, the outcome of the war may have been completely different. In fact, Churchill called Turing and his team "the geese that laid the golden eggs," citing their work as the single biggest contribution to the Allied victory.
9. What Kind of Leader Are You? The Answer Means Everything to Your Em...
According to a recent Gallup World Poll, a lot of people around the globe hate their job--and specifically their boss. In fact, the survey found that only 15 percent of the one billion full-time employees worldwide are engaged. In the U.S., roughly 30 percent are engaged, but that still leaves 70 percent of Americans unhappy campers when Monday morning rolls around.
10. A 10-Point Framework for the Digital Journey
In the near future, it may be difficult to imagine a company not involved in some way in digitisation. While Uber, Amazon and Netflix grab headlines for their growth in the platform economy, traditional companies are also digitising. UPS uses smart routing devices to trim millions of miles on their delivery routes. Caterpillar now equips its tractors and diggers with internet-enabled sensors that provide data to customers and itself for smarter maintenance and performance.