Implications of Components of Income Excluded from Pro Forma Earnings for Future Profitability and Equity Valuation

Abstract:  This study addresses three research questions relating to total exclusions, special items, and other exclusions. Are each of these pro forma exclusion components forecasting irrelevant? Are each of the exclusion components value irrelevant? Are the valuation multiples on the exclusion components justified by their ability to forecast future profitability as predicted by the Ohlson (1999) model? Findings are generally consistent with the market-inefficiency results presented in Doyle et al. (2003) . Total exclusions are valued negatively by the market despite the prediction that total exclusions will be valued positively. Valuation results also suggest that stocks with positive other exclusions are overpriced.     

Estimating the Off-farm Labor Supply in Canada

Off-farm labor supply in Canada is modeled using separate off-farm labor participation and off-farm labor supply equations, which allows variables to affect participation and labor supply differently. The data used in this study are from Statistics Canada's Agriculture-Population Linkage Database, which links the Population Census for 1986 to a 20% sample from the Census of Agriculture. Results indicate that age, education and wages have large, significant and opposite effects on participation and supply, and that government efforts to stabilize and supplement farm incomes through rural employment programs may have less effect on labor allocation decisions than do the underlying demographic factors and regional and farm characteristics.
Nous modélisons id les disponibilités d'emploi extérieur (hors-ferme) pour les agriculteurs, utilisant des équations distinctes pour la participation aux emplois extérieurs et pour l'offre des emplois extérieurs, ce qui permet de laisser les variables influer différemment sur les deux éléments. Les donées utilisées proviennent de la base de données de Statistique Canada sur le couplage agriculture-population, laquelle relie le recensement de la population de 1986 à un échantillon de 20 % prélevé sur le recensement de l'agriculture. Les résultats font voir que l'âge, le niveau de scolarisation et les salaires ont de grands effets, significatifs mais opposés, sur l'utilisation et sur les disponibilites d'emplois extérieurs et que les initiatives de'État pour stabiliser et compléter le revenu agricole au moyen de programmes d'emploi rural auraient mains d'effets sur les décisions d'attribution des emplois que les facteurs sous-jacents relevant de la démographie et des caractéristiques particulières de chaque région et exploitation.     

Test development and use: New twists on old questions

Over the past several decades, there have been some significant advances in psychological science, specifically in our knowledge about important questions to address with respect to the development and use of assessment tools. This article focuses on developments in research and guidelines for practice in five selected areas that, if applied, will lead to more informed use of assessment tools. The five areas that we discuss are validity generalization, statistical significance testing, criterion measures, cutoff scores, and cross‐validation. © 2005 Wiley Periodicals, Inc.     

Pricing and Mispricing Effects of SFAS 131

Abstract:  We investigate the effects of the introduction of Statement of Financial Accounting Standards No. 131 (SFAS 131) on the market's valuation of foreign earnings. Thomas (1999) documents that investors discount the value of foreign earnings for US multinational companies. He conjectures but does not test the possibility that this finding is due to poor disclosure related to foreign operations. We find strong evidence that the introduction of the standard is positively associated with the pricing of foreign earnings. In addition, we use both the Mishkin (1983) test and a zero-investment hedge portfolio test and find that investors' mispricing of foreign earnings lessens (and in fact disappears) after SFAS 131. This study is one of the first attempts to show that improved disclosure reduces mispricing.     

THE EFFECT OF A SINKING FUND ON THE REOFFERING YIELDS OF NEW PUBLIC UTILITY BONDS

In this study, empirical tests are conducted to determine the impact of a sinking fund on reoffering yields of a sample of new public utility bonds sold between January 1977 and March 1982. The findings of the regression analysis are consistent with the hypotheses that the value of the sinking fund varies with the default risk of the issuer and with market expectations of future interest rate movements, and that the sinking fund improves the liquidity of a bond issue.     

Beyond belief: A benchmark for human resources

Many Human Resource (HR) professionals feel and believe that they have made progress during the 1980s. Unfortunately, without data to benchmark progress, assessments must depend on perception rather than evidence. To move beyond belief towards a national HR database, this article reports research on over 10,000 individuals in 1200 businesses in 91 firms. It establishes a benchmark for HR practices and HR professionals. It also highlights areas where HR professionals may focus attention to become more successful as business partners.