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

Dimitrios Kousenidis (), Christos I. Negakis and Iordanis N. Floropoulos
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Christos I. Negakis: Aristotle's University of Thessaloniki, Department of Economics, Division of Business Administration 540 06 Thessaloniki Greece, Postal: Aristotle's University of Thessaloniki, Department of Economics, Division of Business Administration 540 06 Thessaloniki Greece
Iordanis N. Floropoulos: Aristotle's University of Thessaloniki, Department of Economics, Division of Business Administration 540 06 Thessaloniki Greece, Postal: Aristotle's University of Thessaloniki, Department of Economics, Division of Business Administration 540 06 Thessaloniki Greece

Managerial and Decision Economics, 1998, vol. 19, issue 1, 55-58

Abstract: 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. © 1998 John Wiley & Sons, Ltd.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:19:y:1998:i:1:p:55-58

DOI: 10.1002/(SICI)1099-1468(199802)19:1<55::AID-MDE868>3.0.CO;2-O

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