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1. Economic Outlook Remains Uncertain  

BY MATTHEW G. LAMOREAUX
Recessions—roughly two per decade—have occurred quite regularly since World War II. Most last less than four quarters, according to International Monetary Fund data. But the depth and breadth of recessions are notoriously difficult to predict. This article focuses on what CPA financial executives have experienced in the current recession, using data from the first quarter Business and Industry Economic Outlook Survey (tinyurl.com/d2tomw) conducted by the AICPA and the University of North Carolina’s Kenan-Flagler Business School.

2. Managing Customer Profitability  

BY Marc J. Epstein, Michael Friedl and Kristi Yuthas
All people may be created equal, but the same can’t be said for customers. Everyone knows that some customers are more profitable than others. Conversely, some are downright unprofitable. Knowing which is which is the all-important question. Despite enormous variations in profitability, many companies continue unprofitable relationships with customers, often providing them with pricing and service levels identical to those received by the most profitable ones.

3. A Better Way to Gauge Profitability  

BY David C. Burns, J. Timothy Sale and Jens A. Stephan
EXECUTIVE SUMMARY Return-on-equity (ROE) is the correct profit metric to evaluate the performance of a business. However, the primary emphasis on financial ratio analysis must be on operating performance. The "advanced" version of the DuPont model remedies the original model’s failure to cleanly separate the effects of operating and financing decisions.

4. Squeeze Play   CPEDirect

BY Robin Cooper
The management accounting profession is going through a major sea change as two opposing forces come into play. The first is the downsizing through reengineering of the financeand hence management accountingfunction; the second is the growing importance of cost management. (For more on these subjects, see A Smarter Way to Run a Business, by Eileen Morrissey and Gary Hudson.
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