Step 2: Estimate the Modified Model, which is defined below: (Eq. 2) = Total accruals in year divided by total assets in year , = Revenues in year less revenues in year , = Delta revenues in year less delta net receivables in year , = Gross property plant and equipment in year , = Total assets in year , , , and = Parameters to be estimated, namely alphas, = Residuals in year . So how do I estimate the alphas , , and ? Alphas, coefficients or parameters are estimated by means of an ordinary least squares regression (OLS). This is shown in the video tutorial. After we know what the alphas are, you denote these as , , and . These are the estimated alphas or parameters.
Step 2: Estimate the Modified Model, which is defined below: (Eq. 2) = Total accruals in year divided by total assets in year , = Revenues in year less revenues in year , = Delta revenues in year less delta net receivables in year , = Gross property plant and equipment in year , = Total assets in year , , , and = Parameters to be estimated, namely alphas, = Residuals in year . So how do I estimate the alphas , , and ? Alphas, coefficients or parameters are estimated by means of an ordinary least squares regression (OLS). This is shown in the video tutorial. After we know what the alphas are, you denote these as , , and . These are the estimated alphas or parameters.
EN%20Formulas%20Modified%20Jones%20Model.docx