Chapter 3

Accounting-Based Measures

This chapter illustrates accounting-based measures, which are indicators constructed starting from financial statements: the profit & loss (P&L) account, balance sheet, and cash flow statement. More specifically, three main types of accounting metrics are presented.

Keywords

return on investments; residual income; economic value added

This chapter illustrates accounting-based measures, which are indicators constructed starting from financial statements: the profit & loss (P&L) account, balance sheet, and cash flow statement. More specifically, three main types of accounting metrics are presented:

1. Traditional accounting ratios

2. Innovative accounting indicators introducing the cost of capital and moving from ...

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