Abstract
Now if the profit is unreliable, massaged, tarted up and so is the capital employed and if you express nonsense as a ratio of nonsense or garbage as a ratio of garbage — what do you get?
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Notes and References
James Ball’s Stockton lecture: Simon Holberton, “Short-termism: myth or reality?”, Financial Times (11 February 1991).
Donaldson Brown inventing ROI: H. Thomas Johnson and Robert S. Kaplan, Relevance Lost: The Rise and Fall of Management Accounting (Boston: Harvard Business School Press, 1987) p. 11.
The more you sell the more you lose: Keron Bhattacharya, BL: Where Does the Future Lie? (Jay Consultancy Services, 1981);
Keron Bhattacharya, “Why BL’s future should be decided now”, The Times (London) (23 November 1984).
Argyll’s accounting adjustment: Financial Times (26 June 1987).
Pineapple Studios: Keron Bhattacharya, “Shaping up the balance sheet to get better P/Es”, Accountancy Age (15 May 1986).
Reckitt & Coleman: Annual Report (1989).
British Aerospace: Annual Report (1989).
Working party’s suggestion: Ernst & Young, UK GAAP (London: Longman, 1990) 2nd edn, p. 925.
BTR’s profit from the sale of Pretty Polly: “BTR gives its profit a boost”, The Tïmes (6 September 1991).
Fallacy of accounting return: George Terborough, Dynamic Equipment Policy (New York: MAPI, 1949).
Performance bonus based on ROI: H. Thomas Johnson and Robert S. Kaplan, Relevance Lost: The Rise and Fall of Management Accounting (Boston: Harvard Business School Press, 1987) p. 204.
Value added ratio: Keron Bhattacharya, The New Frontiers for Business Analysis (Macmillan 1987), p. 138.
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© 1992 Keron Bhattacharya
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Bhattacharya, K. (1992). Accounting Ratios: The President and his Fortune-teller. In: Accountancy’s Faulty Sums. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-12887-7_10
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DOI: https://doi.org/10.1007/978-1-349-12887-7_10
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