Return on equity, and how leverage can flatter it
Return on shareholders' equity measures how well a business uses its owners' money. Here is how to read it, and how debt and buybacks can make it look better than it is.
10 min read
Insights
Practical reading for business owners.
Articles on operations, manufacturing, engineering, decision making, finance and business. Organised by subject, so you can find what matters to you.
All articles
Rising prices or a bubble? Why valuation is the best clue
Strong price rises do not prove a bubble. Comparing prices with earnings, rents and incomes, against history and against reason, gives the best evidence of how stretched a market is.
10 min read
Running a business through a boom and bust
Booms tempt businesses to over-expand, borrow and extrapolate demand; busts punish them for it. A practical guide to building a business that benefits from good times and survives bad ones.
10 min read
Sales self-management: planning your time, pipeline and energy
Selling well depends on how you manage yourself. A practical system for planning your week, keeping your pipeline honest and sustaining the effort sales requires.
10 min read
Sequential decisions: planning when today's choice shapes tomorrow
Many decisions are steps in a sequence. A plain-English guide to Markov decision processes, policies, value functions, discounting and dynamic programming, with business examples.
10 min read
Share buybacks: when a company invests in itself
What share buybacks and treasury stock are, why a history of buybacks can signal a strong business, and when buybacks help owners and when they do not.
10 min read
Solidifying: keeping and growing customers after the sale
The sale is the start of the relationship, not the end. What the solidifying stage involves, why retention matters so much, and practical habits for keeping, growing and learning from customers.
10 min read
Stop emailing, start communicating: practical steps to be understood
Sending a message is not the same as being understood. Why so much business communication fails, how to choose the right channel, and practical habits that make sure your message actually lands.
10 min read
Testing decision systems before you trust them
How to validate automated decision systems: performance metrics, rare-event simulation, robustness to model errors, trade-off analysis, adversarial testing and responsible deployment.
10 min read
The assets the balance sheet cannot see
Why a company's most valuable assets, its brand and reputation, often appear nowhere on its balance sheet, and what goodwill and intangible assets do and do not tell you.
10 min read
The empathy map: seeing your customer from the inside
An empathy map captures what a customer says, thinks, does and feels. How to build one from real evidence, how sales and product teams use it, and the mistakes that turn it into guesswork.
10 min read
The equity bond: valuing a business by its growing yield
Buffett's idea of treating shares in a great business like a bond whose interest payment rises every year, and why the price you pay still decides the outcome.
10 min read
Need help applying this in your business?
KEVOS provides practical engineering, manufacturing, operations and project support. Describe the problem and get a clear proposal.
Get a Quote