Snapshots of Rethinking Profitability Risk in Financial Firms: A Practitioner’s Framework for Portfolio Decisions

Quickly apply original, key PMR-published papers with Snapshots—a short article companion that distills PMR research into compressed, digestible takeaways, so you can put the paper’s core ideas to work in your investment process—fast. This Snapshot article is based on research arguing that conventional profitability metrics can misclassify financial firms because they do not fully reflect funding costs; a funding-cost-adjusted measure, financial operating profitability (FOP), better identifies economically meaningful differences in subsequent returns.