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Analysis of divisional profitability using the residual income profile |
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| Authors: | Mark L. Frigo James E. Ciecka |
| Abstract: | This paper describes the residual income profile which is a graphical method that summarizes the profitability characteristics of a division of a firm and illustrates the relationship between return on investment and residual income. In addition, the residual income profile shows the sensitivity of residual income to changes in interest rates. |
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