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| Author: | Lurkin, P. Descendre, N. Lievens, D. |
| Title: | The elaboration of a financial chart |
| Journal: | Annales de Sciences Economiques Appliquees
1988 : VOL. 4:2, p.149-182 |
| Index terms: | DECISION MAKING FINANCIAL THEORY PROFITABILITY CAPITAL MANAGEMENT |
| Language: | eng |
| Abstract: | The role of the chart is to present to the director the necessary elements to help him in decision-making and to evaluate the realization of the objectives. It gives an overview of the financial activities of the company and it starts with the global profitability and its decomposition in profit rate and capital flow; this analysis is called "ratio pyramid". Different principles of elaboration of a pyramid is examined and practical applications as for example Boyce's pyramid are given. The importance of ratio pyramid for the management is emphasized. These pyramids give the interrelations between the different departments and the origin for profitability variations. Conclusions are discussed. |
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