The Adoption of Lean Operations and Lean Accounting on the Financial-Performance Measures of Publicly Traded Companies
Date of Award
Ph.D. in Accountancy
James G. Vaughan
Mitchell R. Wenger
For fiscal years 2008 through 2010, manufacturers and service providers that adopted lean operations outperformed companies that did not adopt lean operations. Using non-parametric tests and a matched-pairs design, lean companies had greater returns on both net operating assets (RNOA) and total assets (ROA). Lean companies also experienced better operating cash flows and cash adequacy than non-lean companies. The profit margins and financing-assets ratios were marginally better for lean companies than non-lean companies. Several working-capital measures, however, were not significantly different. Lean companies also experienced higher total-inventory turnover and raw-materials inventory turnover than non-lean companies. Although work-in-process inventory turnover did not differ significantly between the two groups, the test for that hypothesis contained the fewest number of matched pairs due to fewer companies reporting values for work-in-process. Lean companies experienced lower days'-sales in inventory and marginally higher finished-goods inventory turnover than non-lean companies.
Harris, Daniel C., "The Adoption of Lean Operations and Lean Accounting on the Financial-Performance Measures of Publicly Traded Companies" (2012). Electronic Theses and Dissertations. 129.