management earnings forecasts

Collectively our empirical results suggest that having major government customers has a positive impact on the quality of MEFs. By evaluating management earnings forecast research within the context of this framework we render three conclusions.

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Earnings forecasts tend to be optimistically biased with a positive correlation with forecast uncertainty earnings flexibility financial distress investor sentiment and the share price dependency of managers remuneration.

. To predict earnings most analysts build financial models that estimate prospective revenues and costs. Issuing firms enjoy more favorable contracting terms and attract more lenders. First forecast characteristics appear to.

A calendar showing all upcoming earnings announcements. Unlike earnings forecasts other FLS are issued more frequently when uncertainty. We reason that managers are more less likely to issue earnings forecasts in high-trust low-trust countries because these voluntary disclosures are viewed by investors as a more less credible source of information about the firms future profitability.

Earnings forecasts convey timely information about the macroeconomic state. 2008 MFs is characterized as one of the key voluntary disclosure mechanisms by which managers establish or alter market earnings expectations preempt litigation. We find that management earnings forecasts influence the timing and precision of analyst forecasts.

Originalityvalue This paper provides the first empirical reports on the different information asymmetry changes around earnings announcements followed by a good news management forecast from those followed by a bad news forecast. Management Earnings Forecasts and the Cost of Debt Norio Kitagawa and Akinobu Shuto Journal of Accounting Auditing Finance 2019 36. MEFs are mandatory under the stringent regulatory framework in China.

Abstract In a recent paper Hui Matsunaga and Morse have argued that managers may prefer using accounting conservatism instead of issuing management earnings forecasts MFs that may reduce information asymmetry and may lower firms potential legal liability. We conduct our analyses on over 60000 management forecasts issued between 2002 and 2017 and use recession periods defined by the National Bureau of Economic Research to identify downturns. Core Main Inc.

For comparability we only investigate EPS forecasts. 3 585-612 Download Citation If you have the appropriate software installed you can download article citation data to the citation manager of your choice. Firm growth legal liability and litigation risk are significantly associated with forecast pessimism.

In this study we investigate the trading behavior of institutional investors in China according to management earnings forecasts MEFs and earnings announcements EAs. This study examines the stock-price reactions to analyst forecast revisions around earnings announcements to test whether preannouncement forecasts reflect analysts private information or piggybacking on confounding events and news. 2 We keep only point and closed-range forecasts in the sample and exclude open-range and qualitative estimates.

There are a number of studies that shed light on inefficiencies in the IPO market. First forecast characteristics appear to be the least understood component of earnings forecastsboth in terms of theory and empirical researcheven though it is the component over which managers have the most control. Wasley and Wu 2006 conclude that managers are more likely to issue cash flow forecasts when reported earnings are uninformative.

We find that firms tend to issue management earnings forecasts and convey good news before bank loan initiation. We show that like earnings forecasts other FLS generate significant investor and analyst responses. We find evidence consistent with these predictions.

By evaluating management earnings forecast research within the context of this framework we render three conclusions. There was only one downturn during this period the Great Recession which occurred between December 2007 and June 2009. At the same time a robust finding in existing disclosure research is that firms tend to issue fewer forecasts when uncertainty is high eg Waymire 1985 Karamanou and Vafeas 2005.

Moreover when managers disclose negative information to the market earnings forecasts issued by government suppliers have greater price impact than those issued by corporate suppliers. Symbol Name Release Date Release Time Get Email Alerts. Keywords Adverse selection cost Earnings Financial forecasting Good and bad news Information asymmetry.

Management forecasts issuance within a nine-month period prior to the loan activating quarter can lower the subsequent loan spread by 1406 basis points. We collect management forecasts of quarterly earnings from the First Calls Company Issued Guidance CIG database for the period 19962010. Earnings forecasts are based on analysts expectations of company growth and profitability.

The working assumption in the voluntary disclosure literature is that managers have private in- formation which is strategically communicated to investors and analysts via voluntary disclosures like management earnings forecasts. We identify forward-looking statements FLS in firms disclosures to distinguish between forecast-like quantitative statements about earnings and other or non-forecast-like FLS. Up to 10 cash back Management earnings forecasts have received much research attention because under specific circumstances this information can signal the direction of long-term performance of IPOs.

We argue in this article that accounting conservatism serves as a substitute only for informative. According to Hirst et al. In a recent paper Hui Matsunaga and Morse have argued that managers may prefer using accounting conservatism instead of issuing management earnings forecasts MFs that may reduce information asymmetry and may lower firms potential legal liability.

We find evidence that both MEFs and EAs have an effect on the market. 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. By evaluating management earnings forecast research within the context of this framework we render three conclusions.

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