Profit reporting by diversified companies
Abstract
The recent emergence of a large number of conglomerate companies with diversified product lines is
largely due to acquisitions of other companies and the setting up of new activities as divisions within existing
companies,
Initial official opposition to such diversification has been overcome by court rulings and the attractions
of higher profitability.
Managements are by and large extremely allergic to the idea of profit reporting by divisions. This
article examines the reasons cited against divisional profit reporting and finds that none of these make
out a strong enough case against it
The question now is not whether conglomerates should report profits by divisions or not but
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