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Abstract

Psychology and Psychotherapy: Research Study

An Analysis of Accounting Quality Using Reformulated Financial Statements

Submission: October 01, 2019;Published: October 21, 2019

Abstract

This discussion shows the mechanics of a valuation model using financial statement components. The Du Pont decomposition of profitability, applied simply to profitability from operating activities, offers the user the ability to highlight the contributions of asset utilization in generating sales and efficiency in realizing profits from operating (not total) assets.

Abbreviations: ROA: Return On (total) Assets; RNOA: Return on Net Operating Assets; DCF: Discounted Cash Flow; RI: Residual Income; GAAP: Generally Accepted Accounting Procedures; NOA: Net Operating Assets; NFO: Net Financial Obligations; NFA: Net Financial Assets

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