Net income adjustments to meet or beat analyst expectations

Net income adjustments to meet or beat analyst expectations
Document type
Working Paper
Author(s)
Athanasakou, Vasiliki; Strong, Norman; Walker, Martin
Publisher
Manchester Business School
Date of publication
1 October 2007
Series
University of Manchester Business School Working Papers. No. 508
Subject(s)
Trends: economic, social and technology trends affecting business
Collection
Business and management
Material type
Reports

This item is only available to registered users

Register now or Log in

Your use of this content is subject to the terms and conditions of this portal

This paper examines whether UK firms use their discretion over reporting a customized EPS to meet or beat analyst expectations (MBE). After establishing that UK firms customize EPS by making informative adjustments to net income for transitory items, we show that the use of income-increasing adjustments for operating exceptional and other non-recurring items increases the probability of MBE. Firms that MBE with alternative EPS have future inflows per pence of alternative EPS that are significantly higher than for firms that miss the target, and similar to firms meeting expectations with net income.

Related to Trends: economic, social and technology trends affecting business

Follow the money: exploring the link between UK growth and workers' pay packets

Downloadable briefing note looking at the relationship between productivity and pay growth

From precarity to empowerment: women and the future of work

Downloadable paper on ensuring a fair future of work for women

Economic insecurity: the case for a 21st century safety net

Downloadable paper on how economic insecurity is experienced by workers

Mapping millennials' living standards

Downloadable briefing note on UK millennials, including pay and employment

More items related to this subject