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Marketers frequently lament the lack of representation of marketing in the boardroom and the short tenure of CMOs. The most common explanations offered are that marketing is not perceived as a strategic discipline and that marketers do not demonstrate a strong enough understanding of how the business makes money.

Financial accounting is how “score is kept” in terms of business performance. It is, therefore, in the self-interest of marketers to become familiar with financial reporting. Doing so will allow them to understand how marketing activities are recorded. In addition, academic researchers need to understand the meaning of the financial measures that they often use as the metrics of success when researching marketing strategy questions.

This is especially important since financial reporting generally does not recognize assets created by marketing investments. In order to substantiate a claim that “brands are assets”, marketers must be able to explain how the financial accounting rules misrepresent economic reality and why managers might use a different set of principles for management reporting.

We argue that the misrepresentation of market-based assets has two forms of negative impact for marketers: external and internal. The external problems are that financial statements are not especially informative about the value of marketing for the providers of capital and do not provide a true portrait of the economic resource base of the company. The internal problems are that marketers cannot point to valuable assets that they are creating, nor can they be effectively held accountable for the way that these assets are managed given that the assets are not recorded.

We do not expect immediate radical changes in financial reporting because financial accounting rules are designed with the specific interests of the suppliers of capital (debt and equity) in mind. To influence financial accounting developments, such as encouraging greater disclosure of marketing activity in the notes to the published accounts, marketers must be able to communicate in language understood by accountants and the current users of financial accounts. To aid this we provide guidance for marketers on the purpose and practices of accounting. We also discuss how academic marketing researchers might wish to adjust financial accounting data to capitalize a proportion of marketing expenses for companies where marketing is a primary driver of business performance.

Recognition, measurement and disclosure of public sector assets constitute relevant matters for national and international public sector accounting standard-setting. This chapter develops a theoretical analysis drawing upon a dualistic approach contrasting current value and historical cost accounting models. Accordingly, the latter should be adapted and then preferred to cope with public sector specificities, with a view to providing information for and enforcing accountability to citizens and their political representatives. Drawing upon this theoretical setting, our analysis develops a consistent design for the overarching conceptual framework for assets in general, providing illustrative examples for specific categories such as financial, heritage, natural and military assets.

Using harmonized wealth data and a novel decomposition approach in this literature, we show that cohort effects exist in the income profiles of asset and debt portfolios for a sample of European countries, the United States, and Canada. We find that the association between household wealth portfolios at the intensive margin (the level of assets) and household characteristics is different from that found at the extensive margin (the decision to own). Characteristics explain most of the cross-country differences in asset and debt levels, except for housing wealth, which displays large unexplained differences for both the under-50 and over-50 populations. However, there are cohort differences in the drivers of wealth levels. We observe that younger households’ levels of wealth, given participation, may be more responsive to the institutional setting than mature households. Our findings have important implications, indicating a scope for policies which can promote or redirect investment in housing for both cohorts and which promote optimal portfolio allocation for mature households.

Analyzing how the post-Soviet transition interacts with the crisis of market finance exhibits a new “greed-based economic system” in the making. Asset grabbing is at its core and hinders capital accumulation. All the various privatization schemes have triggered off asset grabbing, asset stripping, and asset tunneling. A global contagion of such behavior has spread the power and cohesion of managers/shareholders (oligarchs) worldwide. Financial asset grabbing is less straightforward, though much widespread, and operates in financial markets through new financial products, securitization, firms buying their own shares, hedge funds, stock price manipulation, short selling, and the distribution of stock options.Shadow banking, and more generally a global informal economy, results from grabbing strategies in financial markets that breach the formal rules of capitalism. In alleviating and circumventing the rules, the oligarchy paves the way for economic malpractices and crime, calling capitalist laws into question.In such context, systemic greed underlies unconstrained maximization of relative wealth, for which asset grabbing is a rational means, in a winner-take-all economy. At the present stage of our research, a greed-based economy cannot yet be theoretically defined as a transition either to a new phase of capitalism or to another different system.

Companies that adopt lean operations and lean accounting ultimately should achieve better profitability and cash flows than similarly situated companies that do not adopt lean operations and lean accounting.

Archival data is analyzed through Wilcoxon signed-ranks, matched-pairs tests.

Lean companies had greater returns on net operating assets (RNOA), returns on total assets (ROA), operating cash flows, and cash-adequacy ratios than Non-Lean companies. These results were driven by the larger Lean companies. The profit margins and financing-assets ratios also were marginally better for the Lean companies than the Non-Lean companies.

Lean companies have achieved benefits proposed by the proponents of lean operations. The present study provides a starting point for further research on the financial performance of Lean companies using archival data.

There is limited research on the financial performance of Lean companies that is based on archival data. The present study fills a void in the academic literature. This study measures RNOA, which does not confound operating and financing activities. Additionally, this study utilized a methodology that provides reasonable assurance of the identification of both Lean companies and Non-Lean companies from publicly available data.

According to the market timing theory, firms try to take advantage of windows of opportunity to raise capital by exploiting temporary cost fluctuations of alternative financing sources. In this context, the main objective of this paper is to examine the influence and persistence of market timing in the financing decisions of Brazilian firms that launched IPOs in the period from 2001 to 2011.

We analyze the influence of past market values on the capital structure of these firms, based on the main models proposed by Baker and Wurgler (2002), adapted to reflect the characteristics of Brazilian firms’ financial statements.

We find evidence of market timing, but this behavior is not sufficiently persistent in the period studied to the point of determining these firms’ capital structure. We believe the fact that Brazilian companies rarely carried out follow-on primary equity issues after floating their capital in the period analyzed, due to the presence of more advantageous financing sources (particularly from the national development bank, BNDES), explains the results. Therefore, Brazilian firms appear to be pay heed to different funding sources, in search of windows of opportunity, to guide their financing decisions and determine their capital structures.

The Brazilian capital market has been developing intensely in recent years, making it increasingly relevant to analyze the financing and investment decisions of the country’s listed companies. The Brazilian literature on capital structure is extensive, but few works have addressed the issue of market timing.

We use normal accident theory to analyze the financial sector, especially that part of the financial sector that processed home mortgages, and the mortgage meltdown. We maintain that the financial sector was highly complex and tightly coupled in the years leading up to the mortgage meltdown. And we argue that the meltdown exhibited characteristics of a system or normal accident; the result of a component failure (unusually high mortgage defaults) that, in the context of unique conditions (which included low interest rates and government policy encouraging home loans to less credit-worthy households), resulted in complex and tightly coupled interactions that financial elites and government officials were ill-equipped to control. We also consider the role that agency and wrongdoing played in the design of the financial system and the unfolding of the mortgage meltdown. We conclude that a fundamental restructuring of the financial system, so as to reduce complexity and coupling, is required to avert future similar financial debacles. But we also conclude that such a restructuring faces significant obstacles, given the interests of powerful actors and the difficulties of labeling those responsible for the meltdown as wrongdoers.