The clean surplus accounting method provides elements of a forecasting model that yields price as a function of earnings, expected returns, and change in book value. The theory's primary use is to estimate the value of a company's shares (instead of discounted dividend/cash flow approaches).
The clean surplus accounting method provides elements of a forecasting model that yields price as a function of earnings, expected returns, and change in book value. The theory's primary use is to estimate the value of a company's shares (instead of discounted dividend/cash flow approaches).
Source: Wikipedia "Clean surplus accounting" · CC BY-SA 4.0
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