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This paper empirically examines whether the order of liability and preferred stock accounts presented on the balance sheet is consistent with how the stock market values their riskiness.

This paper measures a firm’s riskiness with idiosyncratic risk and employs the first-difference design to test the relation between idiosyncratic risk and the order of current liabilities, noncurrent liabilities and preferred stock, respectively. Further, the paper tests whether operating liabilities are viewed as riskier than financial liabilities. Finally, the authors partition their sample based on the degree of financial distress and investigate whether the results differ between the two subsamples.

The paper finds that current liabilities are viewed as riskier than noncurrent liabilities and preferred stock is viewed as less risky than current and noncurrent liabilities, consistent with the ordering on the balance sheet. Further, the paper finds that operating liabilities are viewed as riskier than financial liabilities. Finally, the authors find that total liabilities and preferred stock (redeemable and convertible classes) are viewed as riskier for distressed firms than for nondistressed firms.

The authors thoroughly investigate the riskiness of several classes of claims and document that the classification of liabilities and preferred stock classes is relevant to common stockholders for assessing their associated risk.

The National Association for Professional Development Schools (NAPDS) recognizes that there is a tendency for the term “PDS” (Professional Development School) to be used as a catch-all for various relationships that constitute school–university partnership work. The intent of this NAPDS statement is to assert the essentials, or fundamental qualities, of a PDS. NAPDS encourages all those working in school–university relationships to embrace the Nine Essentials of PDSs communicated in this statement. The Essentials are written in tangible, rather than abstract, language and represent practical goals toward which work in a PDS should be directed.

Policy statement.

NAPDS maintains that these Nine Essentials need to be present for a school-university relationship to be called a PDS. Without having all nine, the relationship that exists between a school/district and college/university, albeit however strong, would not be a PDS. How individual PDSs meet these essentials will vary from location to location, but they all need to be in place to justify the use of the term “PDS.”

For those in established PDSs, some aspects of this document will be confirmed, while other aspects may be identified as needing attention. For those aspiring to establish PDSs, the authors offer this statement as a useful guide for their work. NAPDS invites individuals involved in school–university partnerships to share this statement with colleagues in the spirit of continuous improvement. By coming to terms with the challenges and opportunities inherent in this statement, the study can collectively fulfill the vision of this remarkable and distinct partnership called PDS.

This policy statement articulates how the Nine Essentials are the foundation of PDS work.