Qiu published in Journal of Risk and Financial Management

Ken Qiu, assistant teaching professor for the Department of Finance, and his co-authors had their paper, "A Re-Examination of the 'Informational' Role of Non-GAAP Earnings in the Post-Reg G Period," published in the Journal of Risk and Financial Management.

Their study explores non-GAAP earnings, which are adjusted financial figures that exclude items deemed non representative of core business operations. While non-GAAP earnings deviate from standard accounting rules, the paper found that they help investors and analysts better understand a company's true performance.

By using a unique quarterly dataset, the paper compared non-GAAP earnings to traditional GAAP earnings and found that the adjusted numbers more accurately reflect a firm's value and better predict its future operating results. The study also revealed that this advantage holds true even after accounting for factors like company size, management quality or analyst coverage, and remains consistent following the SEC's 2010 disclosure guidance.

Qiu's paper highlights that non-GAAP earnings can offer clearer insights into a company's financial health and future performance than their GAAP counterparts, reinforcing the importance of not always taking things at face value, even in modern financial analysis.

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