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The Cash Recovery Method of Calculating Profitability: An Application to Pharmaceutical Firms

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Abstract

The problems with commonly used accounting profit rates are well documented. In this paper an alternative to accounting profit rates, the cash recovery method is investigated and improved. This improved method is used as a means to estimate profitability in the pharmaceutical industry on a firm level. The profitability estimates give a similar rank order to the accounting profitability rates, but have different magnitudes.

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Authors
  1. Christopher T. Taylor
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Taylor, C.T. The Cash Recovery Method of Calculating Profitability: An Application to Pharmaceutical Firms. Review of Industrial Organization 14, 135–146 (1999). https://doi.org/10.1023/A:1007723726138

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  • DOI: https://doi.org/10.1023/A:1007723726138

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