Determinants of management forecast precision
Article Abstract:
A study was conducted to identify the factors affecting the precision of management forecasts. Cross-sectional logistic regressions were performed on a sample consisting of 1,212 annual and interim management forecasts in firms with simultaneous listing on CRSP, COMPUSTAT and I/B/E/S for the time period Jan. 1983 to Dec. 1986. Findings revealed that managers generate more accurate forecasts of yearly earnings for firms with more involved analyst following and for smaller firms. Moreover, the precision of management forecasts was found to decrease in the length of forecast horizon and the diversity of security returns. These results indicate that managers offer more accurate predictions of earnings when the potential for private information production is the highest and when there is less public information.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
The market interpretation of management earnings forecasts as a predictor of subsequent financial analyst forecast revision
Article Abstract:
Security prices reflect information related to the earnings forecast errors of financial analysts and their subsequent revisions. Security prices may be used to forecast earnings due to the inversion of the relation between accounting earnings and security price. Reactions in security prices to management forecasts are important predictors of subsequent financial analysts' revisions to forecasts. Research reveals that analysts use the subsequent security price fluctuations in reaction to management forecasts to revise their forecasts of future earnings. The timing of the management disclosure affects the efficacy of management forecasts and security price fluctuation to predict subsequent revisions of analysts' forecasts.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1990
User Contributions:
Comment about this article or add new information about this topic:
Relative forecast accuracy and the timing of earnings forecast announcements
Article Abstract:
The results of a study investigating the relationship between the accuracy of financial analyst and management forecasts of earnings per share and the timing of the release of the forecasts are presented. Findings indicate that management's forecasts are statistically more accurate than analysts' forecasts reported prior to, coincidentally with, and up to one month after, the release of the management forecast. Analyst forecasts reported nine or more weeks after the management report were more accurate than the management forecasts. Additionally, results were sensitive to the timing of the fiscal year.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1986
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: China's management training at the crossroads. Strategic choice, organizational change, and training policies: case studies in high technology firms
- Abstracts: AT&T seeks to use Soviet satellites for East-West calls. US Sprint subsidiary and Soviet agency form data-services venture in U.S.S.R
- Abstracts: Rivals take aim at IBM's workstations. LSI Logic says 12 computer firms use its chips to build Sun clones. Small computer firm to unveil laptop to run software of big makers machines
- Abstracts: IBM introduces line of workstations; industry analysts impressed by prices. part 2 IBM unveils long-awaited mainframes
- Abstracts: Complementarity of prior accounting information: the case of stock dividend announcements. Economic sufficiency and statistical sufficiency in the aggregation of accounting signals