Atleast 250 words with no plagiarism. Thank You Determine how a firm's valuation using the earnings-based...

Atleast 250 words with no plagiarism. Thank You

Determine how a firm's valuation using the earnings-based valuation method would be impacted when using aggressive versus conservative accounting. Provide evidence to support your conclusion.

Expert Solution

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

Earnings based valuation:

It is a method of equity valuation in which the value of the company is determined by discounting the future earnings of the company.

In an aggressive accounting method, the company tends to enhance its earnings by inflating its profits.
It tends to ignore future losses or liabilities.

Due to this, the forecasted future earnings of the company is higher by the analyst.

Hence enhancing the VALUE OF THE COMPANY AND ITS STOCK PRICE from its intrinsic value.

Example: Enron in the USA, Satyam in India.

In conservative accounting methods, the company tends to recognise all the possible future losses but not any gains. Due to which the profit of the company tends to decrease.

Due to this, the forecasted future earnings of the company is lower by the analyst.

Hence decreasing the VALUE OF THE COMPANY AND ITS STOCK PRICE from its intrinsic value.

jeff jeffy answered 1 year ago

Is the Middle East undergoing a democratic revolution? (Atleast 250 words)

No Plagiarism please 250 words at least For this discussion forum you will research ONE local...

No Plagiarism please 250 words at least For this discussion forum you will research ONE local community resource that is available to support individuals who are in need of assistance related to one of the health issues discussed in this week's modules (disease prevention, substance abuse/addictions, or aging, dying, and death). For the resource you choose, please provide the following information: Resource name, location, mission, summary of services provided, and the populations the resource serves. Your post should be at...

Present an argument explaining the benefits of the earnings-based valuation method. Explain how this valuation approach...

Present an argument explaining the benefits of the earnings-based valuation method. Explain how this valuation approach may generate accurate results. Evaluate the inherent challenges associated with earnings-based valuation. Provide suggestions for how analysts may overcome such challenges.

How does Starbucks Corporation manage the environmental risks? (250 words) No Plagiarism (copying) please.

How can corporate culture be changed? Give examples. (250 words) No Plagiarism (copying) please.

Government Question. 250 WORDS MINIMUM. PLEASE AND THANK YOU! Most of the democratic countries of the...

Government Question. 250 WORDS MINIMUM. PLEASE AND THANK YOU! Most of the democratic countries of the world have abolished capital punishment. Why do you think the United States still uses execution? If other countries had our crime rate, do you think they would want capital punishment? List arguments for and against capital punishment. Should we draw the line according to age or severity of the crime?

what do you think is the rationale for earnings based valuation? Advantages and concerns?

Atleast 250 words Begin by identifying an organizations diversification strategy that did not succeed in creating...

Atleast 250 words Begin by identifying an organizations diversification strategy that did not succeed in creating competitive advantage Explain why you believe it failed. Analyze how, if approached differently, the diversification could have been more successful

International Monetary Fund In 250 words or more Describe its organization.(No Plagiarism please)

Please answer with a minimum of 250 words. Thank you We have learnt that securities markets...

Please answer with a minimum of 250 words. Thank you We have learnt that securities markets are efficient most of the times, that is, security prices reflect all available information and it is not possible to beat the market consistently. However, there are instances or time periods when markets don't seem to be efficient and investors are able to earn excess returns. These are known as anomalies. Read the following discussion about market anomalies and share your views on this....

Question