The rate of return on assets of those firms has been steadily declining and is now one-quarter of what it was in 1965.
FORBES: The Good News On The Key Economic Issue of Our Times: Management Innovation
This cultural transformation was marked by a change in the growth rate of return on assets from -8.7% to 14.1% over 11 years.
In a Deloitte study of 20, 000 US firms, the rate of return on assets and invested capital declined by 75 percent during the period 1965-2011.
The rate of return on assets of US firms is one-quarter of what it was in 1965, Life expectancy of firms in the Fortune 500 has declined from over 50 years to 15 years, and is heading toward 5 years, if nothing changes.
Historians will marvel at the extraordinary escalation in executive pay from 24 times worker pay in 1965 to 275 times worker pay in 2007, at a time when the rate of return on assets of US companies declined by 75% and the life expectancy of a firm in the Fortune declined from 75 years to less than 15 years.
As of December 2011, CAT was assuming an 8.5% rate of return on plan assets.
FORBES: Caterpillar's Chinese Disaster Has Us Wondering, What Else?
Many states still discount their pension liabilities by the assumed rate of return on their assets, often around 8%.
ECONOMIST: Buttonwood: A trillion here, $500 billion there | The
Lydall ( LDL) lowered its expected long-term rate of return on plan assets to 7.75% for 2012, from a prior 8%.
FORBES: Caterpillar's Chinese Disaster Has Us Wondering, What Else?
The bank has a return on equity rate of 10.4% in fiscal 2011, and a return on assets rate of 0.60% in 2011.
FORBES: Delphi Management's Top Five New Buys: CVS,USB,EAT,LIFE,CNKA
Central bankers have also bet that QE would drive investors into riskier assets, reducing the required rate of return on new business investments.
As with a remainder trust, the IRS takes a snapshot of the deal when it's created, assumes the assets will earn a set rate of return--now just 7.2% --and taxes the assets being passed to heirs based on that.
应用推荐