Please use this identifier to cite or link to this item: https://doi.org/10.2308/accr.2010.85.6.2047
Title: Do supplementary sales forecasts increase the credibility of financial analysts' earnings forecasts?
Authors: Keung, E.C. 
Keywords: Financial analyst
Forecast accuracy
Revenue forecast
Sales forecast
Issue Date: 2010
Source: Keung, E.C. (2010). Do supplementary sales forecasts increase the credibility of financial analysts' earnings forecasts?. Accounting Review 85 (6) : 2047-2074. ScholarBank@NUS Repository. https://doi.org/10.2308/accr.2010.85.6.2047
Abstract: This study examines whether the market reacts more strongly to earnings forecast revisions when financial analysts supplement their earnings forecasts with sales forecasts. I find that earnings forecast revisions supplemented with sales forecast revisions have a greater impact on security prices than do stand-alone earnings forecast revisions, controlling for the incremental information content in sales forecasts. Supplemented earnings forecasts are more accurate ex post, controlling for other individual analyst characteristics. Results are robust to controlling for earnings persistence and time effects. Taken as a whole, financial analysts are more likely to supplement their earnings forecasts with sales forecasts when they have better information. Supplementary sales forecasts appear to lend credibility to earnings forecasts because financial analysts provide sales forecasts when they are more informed.
Source Title: Accounting Review
URI: http://scholarbank.nus.edu.sg/handle/10635/43794
ISSN: 00014826
DOI: 10.2308/accr.2010.85.6.2047
Appears in Collections:Staff Publications

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