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10_Perf_Measurement_Markets - The extent timing and risk of...

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Click to edit Master subtitle style Performance Measurement:  Markets ACCY 560 Information in Value Creation July 5, 2011
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Asset valuation Po = CF1 x Factor Assume a company’s stock price/share = $40 and EPS = $3  $40 = $3 x Factor (r,g,t) Factor (r,g,t) = $40 / $3 = 13.333 Price-to- Earnings Ratio f (risk, growth &  time)
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Performance assessment Assessing performance requires benchmarks –  performance is relative, not absolute  Time-series  comparison Cross- section  comparison X
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Comparative performance  measures
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Performance assessment  complication Investors would like to assess the effects of  economic factors on a company’s value
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Unformatted text preview: The extent, timing and risk of the company’s future cash flows Accounting-related factors complicate this objective Use of different accounting methods Quality of accounting information Management of earnings Objectives of accounting Stewardship Valuation Conducting, supervising or managing something entrusted to one’s care A fiduciary Process of assessing the value or worth of something An appraiser Remainder of this week July 7 Strategy & strategic management – 1 July 6 Communications lab...
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