Course Description

The Predictability of Clean Surplus Accounting

Accounting & Auditing

(10 credits) $129.95

This course is divided into 3 sections. The first section visits the history of Clean Surplus accounting and the reason it was developed. Section I also compares presently used accounting concepts with the simple Clean Surplus concepts of Return on Owners’ Equity. ROE is the most widely used comparison ratio in Finance, but this course uses ROE in a Clean Surplus relationship. Clean Surplus develops its own Book Value (Owners’ Equity) for the ROE relationship.

When the Return on Equity is developed in this new light, it lends itself to a more accurate comparison method of determining the operating efficiency of a company.

The second section delves into the determination of the predictability of Clean Surplus and also the valuation of a company using Clean Surplus. This section introduces some of the techniques used by the Greatest Investor of all time, Warren E. Buffett, and how he uses the Clean Surplus method in the calculation of 10-year projections and discounting back to the present to determine the all important present value of a company. In other words, does Clean Surplus show predictability as was originally intended?

The third section shares with you, the Doctoral dissertation research of Dr. Joseph Belmonte in the determination of the probability of selected portfolios outperforming the market averages and also the probability of the correlation of the Clean Surplus ROE of a portfolio and the future returns of that portfolio. Research on both the Dow Jones Industrial average as well as the S&P 500 are explored in great detail.

The three sections combined teach you about Clean Surplus accounting as well as research on the probabilities of predictability of Clean Surplus. Predictability was why Clean Surplus was developed to begin with.

Major Subjects:

	History of Clean Surplus Accounting
	Determining the Earning Capacity of a Company
	How to Determine the Operating Efficiency of a Company
	Academic Mystification
	Accounting Return On Equity
	Predictability of the Finance Valuation Models
	Clean Surplus ROE: A Comparable Efficiency Ratio
	How Clean Surplus Accounting Recognizes the Quality of a Company
	Using Clean Surplus Accounting to Determine the Value of a Company
	Beyond Buffett - The Dow Jones 30 Industrials
	Beyond Buffett - The S&P 500
	Determining Predictability