The information content of the president's letter to shareholders

Article Abstract:

The president's letter to shareholders is a useful tool for assessing the amount of permanent versus transitory components of earnings. This was gleaned from a measurement of the information content of the president's letter as the number of words with negative connotation, using an automated content analysis method. A strong relationship between the negativity of the letter and percentage changes in sales, earnings levels divided by stock price, book rate of return, dividend changes divided by stock price and stock returns was noted.

Research, Usage, Records and correspondence, Content analysis (Communication), Content analysis, Corporate officers

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The capitalization, amortization, and value-relevance of R&D

Article Abstract:

The reliability, objectivity and value-relevance of R&D capitalization are studied. Results show a direct correlation between R&D expenditures and subsequent earnings, contradictory to the assumption of Financial Accounting Standards No. 2. It is also argued that the failure to reflect R&D capital in stock prices is due to either a systematic mispricing of R&D shares or that excess returns compensate for an extra-market rate risk factor.

Finance, Industrial research

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Value-relevance of non-financial information: the wireless communications industry

Article Abstract:

Investors investing in the cellular telephone industry are prone to depend on non-financial information than financial information to gauge the potential growth of their investments. Investors scrutinize the population size or total population in a company's service area and market penetration statistics to gauge the potential growth of the company, and consequently , their investments.

Psychological aspects, Analysis, Cellular telephone services industry, Cellular telephone services, Investments, Market share, Economic indicators

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