Johnson, Peter and Thomas, Howard (2007) Resource margin accounting : an elucidation and preliminary empirical testing. Management Decision, Volume 45 (Number 3). pp. 420-433. doi:10.1108/00251740710745052 ISSN 0025-1747.

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Abstract

Purpose - The aim of this paper is to describe "resource margin accounting" (RMA) as a valuation framework in strategic analysis.

Design/methodology/approach - The paper defines RMA as an improved framework for valuation in competitive strategy, relative to existing value-added and cash flow methods. The framework was tested on a sample of 300 US manufacturing companies between 1983 and 1998.

Findings - The paper finds that the resource margin approach has greater explanatory power than traditional market-to-book valuation measures.

Practical implications - The resource margin approach is methodologically and empirically superior to economic value-added (EVA) and cash flow models of valuation.

Originality/value - The paper presents and tests a new valuation method: RMA.

Item Type:	Journal Article
Subjects:	H Social Sciences > HF Commerce H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions:	Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Management Decision
Publisher:	Emerald Group Publishing Limited
ISSN:	0025-1747
Official Date:	2007
Dates:	Date Event 2007 UNSPECIFIED
Volume:	Volume 45
Number:	Number 3
Number of Pages:	14
Page Range:	pp. 420-433
DOI:	10.1108/00251740710745052
Status:	Peer Reviewed
Publication Status:	Published

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