ABSTRACT
INTRODUCTION There is no single ideal indicator of corporate performance; each has its own strengths and weaknesses (Barrow and Wagstaff, 1989; Davis and Kay, 1990). Accountants have proposed numerous ratios as indicators of corporate performance. In the space available it is not possible to report all such potential performance measures but, that said, we would be unwilling to base an argument on the use of a single accounting ratio, particularly given the difficulties in splitting the periods and in dealing with the accounting policies of different enterprises. In the previous chapter, labour and total factor productivity growth were examined; here, performance is assessed using two standard accounting ratios: first, the rate of return on capital employed; and second, the annual growth in value-added per employee-hour.
