Commonalities between added value ratios and traditional return on capital employed

Article Abstract:

Recent research has undertaken a comparison between the traditional capital employed (ROCE) accounting ratio and a new ratio devised by Kay and Davis which assesses 'added value on inputs employed' (AVIE) and 'added value on net output' (AVNO). Kay and Davis believe that added value ratios can provide more reliable and comparable assessments of business performance than the widely used ROCE measure. The research found that their new approach provides information about firm rankings which is only slightly different from that produced by the traditional ROCE ratio.

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The cost of equity capital and a generalisation of the dividend growth model

Article Abstract:

Recent research has focused on developing a generalisation of the dividend growth model. A new approach to estimating the growth pattern is based on the theoretical work of Ohlson into the link between share prices and accounting variables, and on the later development of the model by Steele. This has created a generalisation of the growth model with a single growth parameter to a model where the period-on-period growth is specified by three growth parameters.

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The effect of a potential borrower's reporting reputation and financial condition on commercial loan officers' estimates of forecast bias and subsequent loan recommendations

Article Abstract:

Issues concerning a study of the judgements of commercial loan officers when provided with an earnings forecast are discussed. Solid finances and a track record for objective reporting are found to be significant factors in determining loans.

Analysis, Loans

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