Profit Rate Dynamics via ARDL: A Minimal Specification
The profit rate identity can be estimated as a dynamic framework using an autoregressive distributed lag (ARDL) model.
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Tutorial: Stock Price Returns and Beta Coefficients
EdgarStat® contains an internal regression model to calculate the beta-risk coefficient of an individual enterprise stock price return compared to the return of the S&P 500 stock price (market) index. This stock price return regression model is known as CAPM.
Tutorial: Currency Adjustments in Intercompany Financing
In this tutorial, we address comparability adjustments for differences in the currency of the tested loan to that of the comparable transactions.
Tutorial: Reliability of Return on Assets as a Profit Indicator
Notwithstanding its acceptance in Coca Cola Co. v. Commissioner of the IRS, Return on Assets is a controversial profit indicator to use in transfer pricing. At the very least it must be subject to economic analysis to corroborate a relationship between operating profit and operating assets.
Tutorial: Using Regression Analysis to Adjust Profit Indicators
Ad hoc adjustments are a risky endeavor in transfer pricing. Using regression analysis, we can test if asset intensity is relevant to explain the behavior of the operating profit markup or profit margin and calculate a reliable adjustment to the profit indicator.
Tutorial: Using Regression Analysis in TNMM Transfer Pricing
The prevalent use of quartiles to determine profit indicators often results in a wide (unreliable range) and ad hoc assets adjustments. These problems can be solved by using regression analysis, which produces more defensible statistical ranges of the profit indicator resistant to audit scrutiny.