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Figure Figure 1 Growth that compounds

Accumulation versus activity, indexed over twelve quarters

A model, not a measurement: the parameters are stated below so the axes can carry real numbers. Activity peaks within each quarter and returns to where it began. The line that matters is the third one: the same accumulation net of erosion still never resets, but after three years it has reached 289 against the gross figure's 535.

Accumulation versus activity: index of cumulative value over twelve quarters A modelled comparison indexed to 100 at quarter zero. Activity rises to 135 within each quarter and returns to 100 at every quarter boundary, ending where it began. Gross accumulation compounds at 15 percent per quarter and reaches 535. Accumulation net of 5 percent quarterly decay compounds at 9.25 percent and reaches 289: still rising, never resetting, but a little over half the gross figure. 0 100 200 300 400 500 600 0 2 4 6 8 10 12 Cumulative value (index, Q0 = 100) Quarters elapsed 535 289 100 Accumulation, net of decay (9.25%/qtr) Accumulation, gross (15%/qtr) Activity: peaks at 135 within the quarter, resets to 100
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Reference & Evidence

Source: Modelled illustration. Parameters: gross accumulation 15%/quarter; decay 5%/quarter (net 9.25%); activity peaks at index 135 within each quarter and returns to 100 at every boundary. Not measured data.

Each line is a claim from the register this journal publishes against, resolved from the register at build time.

  • A Flows adjust instantly, stocks do not, in the authors' own words: "while flows can be adjusted instantaneously, stocks cannot", and "It takes a consistent pattern of resource flows to accumulate a desired change in strategic asset stocks" dierickx-cool-1989-asset-stock · DC89-C1
  • A All asset stocks decay without maintenance spend, in the authors' own words: "preciates over time because of technological obsolescence; brand awareness erodes because the consumer population is not stationary", since "R&D know-how de"preciates and "all asset stocks" decay "in the absence of adequate" maintenance expenditures dierickx-cool-1989-asset-stock · DC89-C7

Grades: A, verified against the printed page of the primary source · B, primary source, text layer only · C, authoritative secondary · D, reported.

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