Emory University’s own Kristy Towry, associate professor of accounting for the Goizueta Business School, was recently cited by Smart Business in an online publication titled “Unearthing moneymaking gems is often just a case of exploring your company’s financial statements.”
The article claims that by simply evaluating financial statements, firms can discover meaningful patterns and potential moneymaking opportunities to ultimately boost revenue. To support these findings, Smart Business references Professor Towry who states that a “dive into financials can create a competitive advantage by helping executives proactively identify trends and even predict future demands for products and services.” She goes on to explain that a “holistic” view of a firm creates an understandable synthesis of several data sources to accurately predict future performance.
To illustrate the article’s assertions an example is given of business owners who decide to eliminate seemingly unprofitable divisions of product lines after conducting an activity-based analysis. “Executives assume that eliminating unprofitable segments will increase profits, but the fixed expenses don’t go away,” Towry says. “They may end up launching a fatal cash crunch or death spiral once the revenue from that discontinued segment is no longer offsetting those fixed expenses.” Instead, financial data can be used to determine how much overhead is being covered by the sales of each product and therefore if it ultimately logical to discontinue a particular segment or service.
Kristy L. Towry joined the Goizueta Business School faculty in the Fall of 2002, after receiving her Ph.D. from The University of Texas at Austin. She has extensive experience in managerial accounting and finance, having spent 9 years at Exxon Company, USA and Compaq Computer Corp. Dr. Towry’s research relates to the use of accounting information for managerial decision making, with a special focus on managerial control systems and financial incentives. Her work has been featured in publications such as The Accounting Review, Experimental Economics, and The Journal of Management Accounting Research.
Towry’s impressive research has earned her honors such as the American Accounting Association Notable Contributions to Management Accounting Literature Award as well as the “Best Paper” Award at the AAA Management Accounting Section Midyear Meeting.
– Meredith Farahmand