Capital Project Management, Volume III

Summary and Conclusion: Volumes I–III

Competitive advantage is not just a blithe, sloppy expression. It is properly measured as sustained long-term economic profit, or economic value-added, the money left over after all costs are paid, including the overall costs of capital that are not shown on balance sheets and income statements. Accounting profit, “the bottom line” on a firm’s income statement, is a calculation, and is the result of specific managerial decisions over any time period in question, usually short. Sustained positive accounting profits should reflect an organization’s capabilities as they match up against the specific economic forces that structure its competitive domain. If a firm consistently stands at the top of an industry ...