What we have learned relates to three questions regarding an accounting number: ls it priced (i.c., does it
have a coefficient that is significantly different from zero)? ls it priced consistently with
some theoretical value (e.g., for a balance sheet number, is its coefficient equal to 1)? ls a
particular accounting number priced equal to or differently from sitnilar accounting numbers
(e.g.. do all components of net income have the same valuation multiples)? Here are sotne
examples of what we have learned.