Topic：The Role of Disaggregation of Earnings in Stock Valuation and Earnings Forecasting
Time：July 12, 2013（Friday）15:00-16：30
Venue：Room 501, Jiageng Bld 2
Presenter：Pengguo Wang, Professor of Finance and Accounting, University of Exeter, UK
Abstract：
This paper compares and contrasts two accounting information systems, the aggregate earnings system and the disaggregated cash flow/accrual system, examining their relative performance in stock valuation and in forecasting of earnings. It finds, in general, that the forecasts of earnings and predicted market values from the cash flow and accrual system have smaller forecasting errors than those from the aggregate earnings system. The adjusted R-squareds from the disaggregated system are in the main higher than those from the aggregated system when considering the explanatory power of the model-predicted values. The results also show that the cash flow and accrual system forecasts dominate the aggregate earnings system forecasts in a large majority of industries.
Presenter Introduction：
Pengguo Wang received degrees in Mathematics (BSc) and Operational Research (MSc) in China. He then obtained a PhD in Finance at Strathclyde. Prior to joining the University of Exeter Business School, he was a faculty member at Imperial College London and Bristol University. He worked as an ESRC Research Fellow in a joint program in Lancaster Management School and Manchester Business School.
Pengguo’s research, teaching and consulting interests are in the intersection of finance and accounting and include equity valuation, market based accounting research, asset pricing and risk management. His research is supported by KPMG, ACCA, and The Institute for Quantitative Investment Research (INQUIRE-UK) grants.
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