Hold onto your cash: successful companies have the most cash

Article Abstract:

An asset mix that includes high levels of cash assets may result in an above-average return on assets (ROA). This seemingly unorthodox conclusion is revealed by an examination of the financial data of firms in seven industries using data taken over a twenty-year period. The companies' ROA was compared to their management of five asset categories including cash amd property equipment. The results of the analysis indicate that the most successful companies were those that held high levels of cash assets. These cash assets ranged from 14.9% in service industries to 82.2% for professional services. The results could serve as a benchmark for companies wishing to achieve a higher ROA through the creation of an asset mix with high cash asset levels.

Cash basis accounting

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Has productivity measurement outgrown infancy?

Article Abstract:

Results are presented from a study of productivity measurement at US companies.One thousand controllers were surveyed. About 40% of the respondents report that they do not use productivity measurement or improvement programs. Most of the productivity measurement models that are used are unsophisticated. The most commonly used productivity measures analyze labor productivity. The primary role of management accountants in productivity measurement system development is in consulting and data-gathering. Most management accountants report initial exposure to productivity measurement through continuing professional education.

Accounting and auditing, Industrial productivity, Productivity accounting

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