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Performance Measurement at Thomas J. Lipton
Allen, Brandt R.; Rotch, William; Roberts, Evan Case C-2125 / Published April 9, 1997 / 12 pages.
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Product Overview

Lipton has about 50 branded product lines, each of which has a product-line income statement. For many years, the company had used trading profit as a key measure of performance. In recent years, however, other measures have been used, and now a radically different product-line P&L (profit and loss) has been proposed. The new "economic profit" is computed by using a capital charge on assets and inflation-adjusted depreciation. The product-line managers are confused and upset. See also "Thomas J. Lipton, Incorporated (A)" (UVA-C-0914) and "Thomas J. Lipton, Inc. (B)" (UVA-C-0957).




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  • Overview

    Lipton has about 50 branded product lines, each of which has a product-line income statement. For many years, the company had used trading profit as a key measure of performance. In recent years, however, other measures have been used, and now a radically different product-line P&L (profit and loss) has been proposed. The new "economic profit" is computed by using a capital charge on assets and inflation-adjusted depreciation. The product-line managers are confused and upset. See also "Thomas J. Lipton, Incorporated (A)" (UVA-C-0914) and "Thomas J. Lipton, Inc. (B)" (UVA-C-0957).

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