Profits show inflation data as companies revise basis

Almost half of the nation's largest corporations now use inflation-adjusted profit data as a basis for strategy decisions, according to a survey by Hayes/Hill Inc., management consultants. The study shows some 47 percent of the 1,000 largest US manufacturing and mining companies are currently using inflation-adjusted profit analysis (IAPA) data in making basic strategy decisions. This is up from 25 percent last year.

At the individual business unit level the increased incidence of IAPA as a tool for making decisions is even higher, up to 57 percent from 20 percent last year, says Hayes/Hill vice-president Robert E. MacAvoy. "Corporate chiefs seem more sensitive to profit distortion than in the past and seem more willing to come to grips with the problem now, rather than postponing it until the submerged problem undermines the business."