), pp. 520-525. Gerald L. Salamon, "Cash Recovery Rates and Measures of
Ijiri has advocated the preparation of financial reports based upon cash-flow data in order to make the reports more consistent with capital budgeting decision criteria and to make the content of the reports less influenced by the accountingmethod choices of the firm. Another important feature of the cash-flow-based financial reports is that they emphasize the calculation of the firm's cash recovery rate (the ratio of cash recovery' during a period to gross investments outstanding during the period).2 The firm's cash recovery rate is important, because Ijiri has shown that under certain conditions a firm's cash recovery rate converges to a constant which is related to the firm's internal or discounted cashflow rate of return (hereafter, referred to as IRR). 3 This means that if the specified conditions are met, then an estimate of the firm's IRR can be obtained from knowledge of its cash recovery rate. Ijiri has demonstrated the practical usefulness of his ideas by calculating estimates of the IRR for several different actual firms. Ijiri's work is potentially quite important to those parties that require theoretically defensible empirical measures of firm profitability.