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dc.contributor.authorAndersson, Tord
dc.contributor.authorHaslam, Colin
dc.contributor.authorLee, Edward
dc.identifier.citationAndersson , T , Haslam , C & Lee , E 2006 , ' Financialized accounts : Restructuring and return on capital employed in the S &P 500 ' , Accounting Forum , vol. 30 , no. 1 , pp. 21-41 .
dc.identifier.otherPURE: 652875
dc.identifier.otherPURE UUID: cc272abc-43b5-4b95-887e-272ea6cafff7
dc.identifier.otherScopus: 32544452372
dc.description.abstractA central feature of financialization is the argument that the relative autonomy of management has been realigned with the interests of shareholders and their demand for higher returns on capital employed (ROCE). This paper reveals that average ROCE in the S&P 500 has not been transformed in the 1990s, relative to an earlier period, even after extensive corporate restructuring. Deconstructing S&P 500 ROCE reveals how additional cash and profit generated out of income are offset by inflated balance sheet capitalization putting a brake on the ROCE. In the US business combinations are now accounted for at their market value and this, we argue, is forcing a financialized ratchet because management will need to step-up cost reduction to finance balance sheet restructuring. Corporate cash is being used to finance share buy-backs which: facilitate balance sheet restructuring, improve reported ROCE and provide a pool of treasury stock that can be used to reward managers who deliver shareholder value. This paper concludes that the nature and relative scale of these financial transactions can be employed to construct financialized accountsen
dc.relation.ispartofAccounting Forum
dc.titleFinancialized accounts : Restructuring and return on capital employed in the S&P 500en
dc.contributor.institutionHertfordshire Business School
dc.contributor.institutionSocial Sciences, Arts & Humanities Research Institute
dc.contributor.institutionCentre for Research on Management, Economy and Society
dc.contributor.institutionFinance and Accounting Research Unit
dc.contributor.institutionDepartment of Accounting, Finance and Economics
dc.description.statusPeer reviewed
rioxxterms.typeJournal Article/Review

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