✦ LIBER ✦

Analysis of divisional profitability using the residual income profile: a note on cash flows and rates of growth

✍ Scribed by Dimitrios V. Kousenidis; Christos I. Negakis; Iordanis N. Floropoulos

Publisher: John Wiley and Sons
Year: 1998
Tongue: English
Weight: 61 KB
Volume: 19
Category: Article
ISSN: 0143-6570
DOI: 10.1002/(sici)1099-1468(199802)19:1<55::aid-mde868>3.0.co;2-o

No coin nor oath required. For personal study only.

✦ Synopsis

The present note expands on the Frigo and Ciecka (1995) residual income profile in order to analyze the relationship between residual income (RI), return on investment (ROI) and cash flows. The results indicate that in addition to the question of whether RI and ROI are useful in divisional performance evaluation, both measures also have an important role to play as a means of approximating actual cash flow.