Non-earnings information and analysts' revisions of future earnings forecasts.
Item
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Title
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Non-earnings information and analysts' revisions of future earnings forecasts.
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Identifier
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AAI9304632
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identifier
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9304632
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Creator
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Alkhalialeh, Mahmoud Abdul-Haleem.
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Contributor
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Adviser: Steven Lustgarten
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Date
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1992
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Language
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English
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Publisher
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City University of New York.
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Subject
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Business Administration, Accounting | Business Administration, General
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Abstract
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In the accounting literature, little attention has been given to non-earnings information, and to the sources of analysts' revisions other than earnings. This study examines the role of non-earnings information in the formation of analysts' revisions of future earnings. Thus, this study is the first to examine analysts' revisions subsequent to the annual report release. The main argument in this study is that financial statements provide new signals about future earnings, and these signals are utilized by analysts who incorporate them in their subsequent revisions of future period earnings forecasts. This proposition has been tested empirically by examining the association between summary measures derived from financial statements and analysts' revisions of future earnings following the annual report release. These summary measures are simply financial statement variables which include change in receivables, capital expenditures, inventories, sales and accounting rate of return.;The general test model employed by this study is estimated using 1720 observations (firm-years), pooled across firms and over the five year period ending in 1990. The empirical findings are in general consistent with the main argument in this study that financial statements provide incremental information about future earnings beyond that embodied in current earnings. The regression results consistently indicate that financial statement variables are jointly and significantly associated with analysts' subsequent revisions of future earnings. At least two financial statement variables remain significantly associated with analysts' revisions after controlling for the earnings effect. However, only a small proportion of the variances in analysts' revisions are explained by the financial statement variables.;The model employed by this is limited to several financial statement variables which may not provide a complete summary of financial statement information. In addition, the test model does not incorporate other non-earnings information, such as macroeconomic indicators.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
