Accounting for Value

Description

"Accounting for Value" by Stephen Penman, published by Columbia Business School Publishing, explores the principles and practices of value investing through the lens of accounting. Penman emphasizes the importance of understanding financial statements and using accounting information to assess a company's true value. He challenges the conventional focus on short-term earnings and market trends, advocating instead for a long-term approach grounded in fundamental analysis. The book provides a detailed framework for evaluating earnings quality, measuring risk, and making informed investment decisions based on intrinsic value. Penman also discusses the limitations of traditional accounting measures and offers insights into how investors can adjust for these shortcomings. By blending accounting with investment theory, "Accounting for Value" aims to equip readers with the tools to identify undervalued stocks and achieve sustainable investment returns.