Resource margin accounting: an elucidation and preliminary empirical testing Available to Purchase

The aim of this paper is to describe “resource margin accounting” (RMA) as a valuation framework in strategic analysis.

The paper defines RMA as an improved framework for valuation in competitive strategy, relative to existing value‐added and cash flow methods. The framework was tested on a sample of 300 US manufacturing companies between 1983 and 1998.

The paper finds that the resource margin approach has greater explanatory power than traditional market‐to‐book valuation measures.

The resource margin approach is methodologically and empirically superior to economic value‐added (EVA) and cash flow models of valuation.

The paper presents and tests a new valuation method: RMA.