Download or read book Detailed Management Earnings Forecasts written by Kenneth J. Merkley and published by . This book was released on 2014 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide archival evidence on how a particular type of supplementary information affects the credibility of management earnings forecasts. Managers often provide detailed forecasts of specific income statement line items to shed light on how they plan to achieve their bottom-line earnings targets. We assess the effect of this forecast disaggregation on the credibility of management earnings forecasts. Based on a relatively large hand-collected sample of 900 management earnings forecasts, we find that disaggregation increases analysts' sensitivity to the news in managers' earnings guidance, suggesting that analysts find the guidance more credible. More importantly, we identify several factors that influence this relation. First, disaggregation plays a more important role when earnings are otherwise more difficult to forecast. Second, disaggregation is more important after Regulation Fair Disclosure prohibited selective disclosure, especially for firms that were more affected because they had previously provided more private guidance. Finally, in contrast to common assertions in the prior literature, we find that in more recent years, disaggregation matters more for guidance that conveys bad news. Managers as well as researchers should be interested in evidence suggesting that financial analysts find disaggregation especially helpful in contexts where managers' credibility is particularly important.
Download or read book Handbook Of Financial Econometrics Mathematics Statistics And Machine Learning In 4 Volumes written by Cheng Few Lee and published by World Scientific. This book was released on 2020-07-30 with total page 5053 pages. Available in PDF, EPUB and Kindle. Book excerpt: This four-volume handbook covers important concepts and tools used in the fields of financial econometrics, mathematics, statistics, and machine learning. Econometric methods have been applied in asset pricing, corporate finance, international finance, options and futures, risk management, and in stress testing for financial institutions. This handbook discusses a variety of econometric methods, including single equation multiple regression, simultaneous equation regression, and panel data analysis, among others. It also covers statistical distributions, such as the binomial and log normal distributions, in light of their applications to portfolio theory and asset management in addition to their use in research regarding options and futures contracts.In both theory and methodology, we need to rely upon mathematics, which includes linear algebra, geometry, differential equations, Stochastic differential equation (Ito calculus), optimization, constrained optimization, and others. These forms of mathematics have been used to derive capital market line, security market line (capital asset pricing model), option pricing model, portfolio analysis, and others.In recent times, an increased importance has been given to computer technology in financial research. Different computer languages and programming techniques are important tools for empirical research in finance. Hence, simulation, machine learning, big data, and financial payments are explored in this handbook.Led by Distinguished Professor Cheng Few Lee from Rutgers University, this multi-volume work integrates theoretical, methodological, and practical issues based on his years of academic and industry experience.
Download or read book Management Earnings Forecasts written by D. Eric Hirst and published by . This book was released on 2008 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we provide a framework in which to view management earnings forecasts. Specifically, we categorize earnings forecasts as having three components - antecedents, characteristics, and consequences that roughly correspond to the timeline associated with an earnings forecast. By evaluating management earnings forecast research within the context of this framework, we render three conclusions. First, forecast characteristics appear to be the least well-understood component of earnings forecasts - both in terms of theory and empirical research - even though it is the component over which managers have the most control. Second, much of the prior research focuses on how one forecast antecedent or characteristic influences forecast consequences and does not study potential interactions among the three components. Third, much of the prior research ignores the iterative nature of management earnings forecasts - that is, forecast consequences of the current period influence antecedents and chosen characteristics in subsequent periods. Implications for researchers as well as educators, managers, investors, and regulators are provided.
Download or read book Management Earnings Forecasts written by Hwa Deuk Yi and published by . This book was released on 1994 with total page 236 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Management Earnings Forecasts written by Shankar Venkataraman and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we provide a framework in which to view management earnings forecasts. Specifically, we categorize earnings forecasts as having three components - antecedents, characteristics, and consequences - that roughly correspond to the timeline associated with an earnings forecast. By evaluating management earnings forecast research within the context of this framework, we render three conclusions. First, forecast characteristics appear to be the least well-understood component of earnings forecasts - both in terms of theory and empirical research - even though it is the component over which managers have the most control. Second, much of the prior research focuses on how one forecast antecedent or characteristic influences forecast consequences and does not study potential interactions among the three components. Third, much of the prior research ignores the iterative nature of management earnings forecasts - that is, forecast consequences of the current period influence antecedents and chosen characteristics in subsequent periods. Implications for researchers as well as educators, managers, investors, and regulators are provided.
Download or read book Risk Based Forecasting and Planning and Management Earnings Forecasts written by Christopher D. Ittner and published by . This book was released on 2017 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the association between a firm's internal information environment and the accuracy of its externally-disclosed management earnings forecasts. Internally, firms use forecasts to plan for uncertain futures. The risk management literature argues that integrating risk-related information into forecasts and plans can improve a firm's ability to forecast future financial outcomes. We investigate whether this internal information manifests itself in the accuracy of external earnings guidance. Using detailed survey data and publicly-disclosed management earnings forecasts from a sample of publicly-traded U.S. companies, we find that more sophisticated risk-based forecasting and planning processes are associated with smaller earnings forecast errors and narrower forecast widths. These associations hold across a variety of different planning horizons (ranging from annual budgeting to long-term strategic planning), providing empirical support for the theoretical link between internal information quality and the quality of external disclosures.
Download or read book Management Earnings Forecasts written by Sanjeev Bhojraj and published by . This book was released on 1999 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Credibility of Management Earnings Forecasts and Future Returns written by Akinobu Shuto and published by . This book was released on 2013 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book A Reexamination of Bias in Management Earnings Forecasts written by Jong-Hag Choi and published by . This book was released on 2000 with total page 286 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of Macro Information Environment Change on the Quality of Management Earnings Forecasts written by Stephen P. Baginski and published by . This book was released on 2014 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 1990s were characterized by substantial increases in the performance of and investor reliance on financial analysts. Because managers possess superior private information and issue forecasts to align investors' expectations with their own, we predict that managers increased the quality of their earnings forecasts during the 1990s in order to keep pace with the improved forward-looking information provided by financial analysts, upon which investors increasingly relied.Using a sample of 2,437 management earnings forecasts, we document an increase in management earnings forecast precision, management earnings forecast accuracy, and managers' tendency to explain earnings forecasts in 1993-1996 relative to 1983-1986. Given that these forecast characteristics are linked to greater informativeness and credibility, we also document that the information content of management earnings forecasts, as measured by the strength of share price responses to forecast news, increased in 1993-1996 relative to 1983-1986. As expected, the increased information content of management forecasts primarily occurred for firms covered by financial analysts.
Download or read book Management Earnings Forecasts and Simultaneous Release of Earnings News written by Yoel Beniluz and published by . This book was released on 2007 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the hypothesis that when disappointing information regarding a firm's performance is released, the firm's management faces particularly strong incentives to counter the disappointing news with overly optimistic forward-looking statements. To address this issue, the paper investigates the properties of management earnings forecasts released simultaneously with earnings announcements. The paper predicts and finds that the more disappointing the earnings announcement news, the higher the optimistic bias in the simultaneously released management long-horizon forecasts of annual earnings. Since managers may use short-horizon forecasts of quarterly earnings to avoid disappointing earnings announcements, the paper also examines the interplay between management short-horizon forecasts of quarterly earnings and long-horizon forecasts of annual earnings that are released simultaneously. The paper documents a significantly negative association between the news contained in the short-horizon forecasts of quarterly earnings and the optimistic bias in the accompanying long-horizon forecast of annual earnings. The paper also investigates the link between management's decision to issue earnings guidance and the contemporaneous earnings announcement news, finding that, in general, more extreme earnings announcement news results in more earnings guidance. Finally, using market reaction tests, the paper documents that market participants are aware, at least to some extent, of management's tendency to counter disappointing earnings news with overly optimistic forecasts.
Download or read book A Comparison of the Accuracy of Management s Earnings Forecasts and Alternative Surrogate Measures written by Alexander Brian Cameron and published by . This book was released on 1982 with total page 496 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book An Empirical Test of Learning in Management Earnings Forecasts written by Yuan Shi (Ph.D.) and published by . This book was released on 2019 with total page 98 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation examines whether managers issuing earnings guidance learn from the forecast errors in prior earnings guidance issued by them. Using data on quarterly earnings forecasts issued by managers during the period from 2001 to 2016, I find results that are consistent with managers learning from their previous forecast errors to improve their forecast accuracy. However, the intensity of the managers' reactions to previous forecast errors is asymmetric. Consistent with prior literature that emphasizes the importance of meeting or beating forecasts for managers, certain managers that miss their own forecasts tend to be conservative enough in their future forecasts to avoid missing their own forecasts again. However, as expected, when the managers have met or beaten their previous forecasts, they have a smaller forecast error, but they still beat their previous forecasts. Additional analysis suggests that these effects persist even after controlling for potential earnings management to achieve these earnings targets. I also examine the impact of managerial attributes and board governance characteristics on the learning process. My analysis suggests that while CEO overconfidence and CFO overconfidence appear to impede learning, Managerial ability, CEO duality and outside CEO(s) as director(s) strengthen the learning effect. My findings shed light on an important aspect of management guidance and may have implications for users of this information such as financial analysts and investors.
Download or read book Credibility of Annual Management Earnings Forecasts written by Timothy D. Cairney and published by . This book was released on 1994 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Security Analyst Multi year Earnings Forecasts and the Capital Market written by Philip Brown and published by . This book was released on 1985 with total page 188 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Stock Market Reaction to Management Earnings Forecasts written by Christos Naoum and published by . This book was released on 1979 with total page 332 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Management Earnings Forecasts and Value of Analyst Forecast Revisions written by Yongtae Kim and published by . This book was released on 2014 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the stock-price reactions to analyst forecast revisions around earnings announcements to test whether pre-announcement forecasts reflect analysts' private information or piggybacking on confounding events and news. We find that management earnings forecasts influence the timing and precision of analyst forecasts. More importantly, evidence suggests that prior studies' finding of weaker (stronger) stock-price responses to forecast revisions in the period immediately after (before) the prior-quarter earnings announcement disappears once management earnings forecasts are controlled for. To the extent that management earnings forecasts are public disclosures, our results suggest that the importance of analysts' information discovery role documented in prior studies is likely to be overstated.
