This work proposes a structural framework for analyzing the relationship between accounting-based profitability and cash-based profitability as a tool for detecting economic misalignment within firms. Although both measures aim to capture returns on capital, they operate under different recognition regimes and are commonly evaluated in parallel rather than in direct structural comparison. The paper argues that persistent divergence between accounting profitability and cash-based profitability contains meaningful structural information that is lost when each measure is interpreted in isolation. By normalizing both accounting profitability (net income over invested capital) and cash-based profitability (operating cash flow over the same capital base), the framework enables a coherent, longitudinal comparison focused on the evolution of the profitability gap over time. Rather than treating the adjustments between earnings and cash flows as accounting noise or distortions, the framework interprets them as expressions of operational design, working capital dynamics, asset intensity, and the timing of economic realization. The core contribution of the paper lies in distinguishing structural detection from risk assessment: the framework identifies when accounting profitability ceases to be a reliable proxy for underlying economic performance without imposing uniform risk conclusions or generalized judgments. The model is conceptual in nature and intended for intra-firm, longitudinal analysis rather than cross-sectional comparison. It does not claim predictive power, but offers a clear, consistent, and broadly applicable analytical lens for financial analysis, internal governance, audit practice, and valuation, complementing—rather than replacing—traditional earnings- and cash-flow-based approaches.
Jorge Bustos Vargas (2026) studied this question.