Luis Palencia
Professor
Accounting and Control and Analysis of Business Problems
IESE Business School Universidad de Navarra
Spain
Biography
Luis Palencia is professor in the Department of Accounting and Control. Prof. Palencia holds a degree in civil engineering from the Universidad de Cantabria, Spain. He completed his MBA at IESE in 1989, and upon graduation worked for three years in the project management section of the engineering group, Bechtel. One of his assignments involved supervising the works carried out by the construction division of the Barcelona 1992 Organizing Olympic Committee. He joined IESE's faculty in 1992, teaching managerial accounting and analysis of business problems. He obtained his Ph.D. in accounting from the University of California at Berkeley in 1999. His research interests are primarily focused on the area of business valuation using accounting measures, and the effects of the accounting regime on accounting-based valuation models. He is also interested in analysis of profitability and financial diagnosis. Prof. Palencia teaches the courses "Analysis of Business Problems" and "Managerial Accounting," which both feature in IESE's MBA, executive education and doctoral programs. In addition, he has taught at the Haas School of Business Administration while working on his Ph.D., and has been visiting professor at Instituto Internacional San Telmo and the Lagos Business School. Since 1993, Prof. Palencia has participated in a number of consulting projects, most of which have concerned business valuation, an area in which he has developed business models for Internet start-ups, software companies and transportation companies. He has also designed and implemented cost systems for industrial companies.
Research Interest
Areas of Interest * Cost systems and financial information * Accounting based valuation models * Financial statement analysis
Publications
-
The complexity and discretional nature of management decisions requires leaving aside preconceived mental schemas and, using their strong points, generating one's own window on the world for non-technical or highly uncertain questions.
-
Mejorar la gestión de empresas reúne algunos de los mejores casos de negocio elaborados por IESE Business School. Las catorce experiencias descritas en él permiten al lector simular la toma de decisiones en diferentes sectores y ámbitos de la empresa; desde la elección de un mercado de crecimiento hasta la definición de estrategias ante nuevos competidores, o la gestión de personas en entornos multiculturales. El libro es una guÃa para que usted descubra y analice por sà mismo las incertidumbres que rodean la toma de decisiones empresariales. Para su lectura deberá equiparse de lápiz y papel, pero también del rigor, la imaginación y responsabilidad de quien toma las decisiones en la empresa. Aunque el ejercicio puede resultar fatigoso, el aprendizaje está garantizado. ¿Quién dijo que tomar decisiones fuera fácil?
-
Accounting-based valuation models use accounting numbers (earnings and book values) to infer the value of ongoing businesses (as a whole or on a per share basis). The most common accounting valuation model is the Discounted Residual Income model. Although this model is, in theory, insensitive to the accounting regime, the necessary truncation through terminal values leaves it dependent on the accounting. This monograph studies the effect of the accounting regime on the accuracy of the residual income model. It first characterizes the concept of accounting conservatism (through an index) and, second, analyzes the interaction among the drivers of residual income: profitability and growth in assets. The results show how the parameters capturing the evolution of profitability and growth vary with the level of conservatism and also that valuation models that account for that interaction are more accurate than models with continuing values estimated under simpler assumptions.
