The Impact of Earnings on the Pricing of Credit Default Swaps

This study evaluates the impact of earnings on firm credit risk as captured by Credit Default Swaps (CDS). We find that earnings (changes) are negatively correlated with one-year swap premia (changes) after controlling for equity returns but not with longer term premia (changes). We also find that earnings surprises are significantly correlated with one-year CDS premia changes in the short window surrounding preliminary earnings dates and that absolute earnings surprises are significantly correlated with absolute one-year CDS premia changes in the short window surrounding SEC filing dates. These results suggest that high earnings convey favorable information about the short-term default risk of firms but not about the long term default risk. We further document that accruals/cash flow information conveyed by SEC filings provides information about long-term credit risk. Furthermore, the empirical results are consistent with structural and hybrid model-driven implications of CDS pricing

CUTANEOUS ANGIITIS (VASCULITIS)

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/66185/1/j.1365-4362.1978.tb06119.x.pd

The pricing of conservative accounting and the measurement of conservatism at the firm-year level

This paper analyzes the relation between equity prices and conditional conservatism and introduces a new measure of conservatism at the firm-year level. We show that the asymmetric properties of conservative accounting, the existence of non-accounting sources of information, and the properties of GAAP related to special items combine to generate a nonlinear relation between unexpected equity returns and earnings news (the shock to expected current and future earnings). Based on this model, we construct a conservatism ratio (CR) defined as the ratio of the current earnings shock to earnings news. CR measures the proportion of the total shock to expected current and future earnings recognized in current year earnings. Ranking firms according to CR, we show empirically that higher CR firms have more leverage, increased volatility of returns, more incidence of losses, more negative accruals, and increased volatility of earnings and accruals, consistent with the literature on conservative accounting

Accounting Restatements: Are they Always Bad News for Investors?

This study investigates a large sample of financial statement restatements over the period 1986-2001, and compares restatements caused by changes in accounting principles to those caused by errors. Typically, investors perceive restatements as negative signals due to three potential reasons: (i) the restatement indicates problems with the accounting system that may be manifestations of broader operational (and managerial) problems, (ii) the restatement causes downward revisions in future cash flows expectations, and (iii) the restatement indicates managerial attempts to cover up income decline through “cooking the books”. We provide evidence that market reactions to restatements due to errors are generally negative. We show that these restatements come in periods of declining profits and lower profits than industry peers for the restating firms, consistent with both opportunistic managerial behavior and operational problems. However, investors’ reactions to income-increasing restatements due to errors are not different from zero, suggesting that the perceived failure of the accounting system is just offset by the upward revisions in future cash flow expectations in these cases of income-increasing errors. Thus, our combined results show that not all restatements are alike; users of the information need to carefully assess the existence and potential effects of the three factors that typically cause the downward revisions in stock prices on a case by case basis

PlantCV v2: Image analysis software for high-throughput plant phenotyping

Systems for collecting image data in conjunction with computer vision techniques are a powerful tool for increasing the temporal resolution at which plant phenotypes can be measured non-destructively. Computational tools that are flexible and extendable are needed to address the diversity of plant phenotyping problems. We previously described the Plant Computer Vision (PlantCV) software package, which is an image processing toolkit for plant phenotyping analysis. The goal of the PlantCV project is to develop a set of modular, reusable, and repurposable tools for plant image analysis that are open-source and community-developed. Here we present the details and rationale for major developments in the second major release of PlantCV. In addition to overall improvements in the organization of the PlantCV project, new functionality includes a set of new image processing and normalization tools, support for analyzing images that include multiple plants, leaf segmentation, landmark identification tools for morphometrics, and modules for machine learning

The Impact of Earnings on the Pricing of Credit Default Swaps

This study evaluates the impact of earnings on credit risk in the Credit Default Swap (CDS) market using levels, changes, and event study analyses. We find that earnings (cash flows, accruals) of reference firms are negatively and significantly correlated with the level of CDS premia, consistent with earnings (cash flows, accruals) conveying information about default risk. Based on the changes analysis, a 1 percent increase in ROA decreases CDS rates significantly by about 5 percent. We also find that (1) CDS premia are more highly correlated with below-median earnings than with above-median earnings and (2) CDS premia are more highly correlated with earnings of low-rated firms than with earnings of high-rated firms. Evidence indicates further that short-window earnings surprises are negatively and significantly correlated with CDS premia changes in the three-day window surrounding the preliminary earnings announcement, although the impact is concentrated in the shorter maturities

Use of information and communication technologies to support effective work practice innovation in the health sector: a multi-site study

<p>Abstract</p> <p>Background</p> <p>Widespread adoption of information and communication technologies (ICT) is a key strategy to meet the challenges facing health systems internationally of increasing demands, rising costs, limited resources and workforce shortages. Despite the rapid increase in ICT investment, uptake and acceptance has been slow and the benefits fewer than expected. Absent from the research literature has been a multi-site investigation of how ICT can support and drive innovative work practice. This Australian-based project will assess the factors that allow health service organisations to harness ICT, and the extent to which such systems drive the creation of new sustainable models of service delivery which increase capacity and provide rapid, safe, effective, affordable and sustainable health care.</p> <p>Design</p> <p>A multi-method approach will measure current ICT impact on workforce practices and develop and test new models of ICT use which support innovations in work practice. The research will focus on three large-scale commercial ICT systems being adopted in Australia and other countries: computerised ordering systems, ambulatory electronic medical record systems, and emergency medicine information systems. We will measure and analyse each system's role in supporting five key attributes of work practice innovation: changes in professionals' roles and responsibilities; integration of best practice into routine care; safe care practices; team-based care delivery; and active involvement of consumers in care.</p> <p>Discussion</p> <p>A socio-technical approach to the use of ICT will be adopted to examine and interpret the workforce and organisational complexities of the health sector. The project will also focus on ICT as a potentially <it>disruptive innovation </it>that challenges the way in which health care is delivered and consequently leads some health professionals to view it as a threat to traditional roles and responsibilities and a risk to existing models of care delivery. Such views have stifled debate as well as wider explorations of ICT's potential benefits, yet firm evidence of the effects of role changes on health service outcomes is limited. This project will provide important evidence about the role of ICT in supporting new models of care delivery across multiple healthcare organizations and about the ways in which innovative work practice change is diffused.</p

Effects of Two Commercial Electronic Prescribing Systems on Prescribing Error Rates in Hospital In-Patients: A Before and After Study

In a before-and-after study, Johanna Westbrook and colleagues evaluate the change in prescribing error rates after the introduction of two commercial electronic prescribing systems in two Australian hospitals

LSST: from Science Drivers to Reference Design and Anticipated Data Products

(Abridged) We describe here the most ambitious survey currently planned in the optical, the Large Synoptic Survey Telescope (LSST). A vast array of science will be enabled by a single wide-deep-fast sky survey, and LSST will have unique survey capability in the faint time domain. The LSST design is driven by four main science themes: probing dark energy and dark matter, taking an inventory of the Solar System, exploring the transient optical sky, and mapping the Milky Way. LSST will be a wide-field ground-based system sited at Cerro Pach\'{o}n in northern Chile. The telescope will have an 8.4 m (6.5 m effective) primary mirror, a 9.6 deg$^2$ field of view, and a 3.2 Gigapixel camera. The standard observing sequence will consist of pairs of 15-second exposures in a given field, with two such visits in each pointing in a given night. With these repeats, the LSST system is capable of imaging about 10,000 square degrees of sky in a single filter in three nights. The typical 5$\sigma$ point-source depth in a single visit in $r$ will be $\sim 24.5$ (AB). The project is in the construction phase and will begin regular survey operations by 2022. The survey area will be contained within 30,000 deg$^2$ with $\delta<+34.5^\circ$, and will be imaged multiple times in six bands, $ugrizy$, covering the wavelength range 320--1050 nm. About 90\% of the observing time will be devoted to a deep-wide-fast survey mode which will uniformly observe a 18,000 deg$^2$ region about 800 times (summed over all six bands) during the anticipated 10 years of operations, and yield a coadded map to $r\sim27.5$. The remaining 10\% of the observing time will be allocated to projects such as a Very Deep and Fast time domain survey. The goal is to make LSST data products, including a relational database of about 32 trillion observations of 40 billion objects, available to the public and scientists around the world.Comment: 57 pages, 32 color figures, version with high-resolution figures available from https://www.lsst.org/overvie