Mohamad hossein Ghaemi; Taher Eskandarli
Volume 10, Issue 40 , January 2014, , Pages 53-75
Abstract
This paper studies the behavior of managers in annual Earnings Forecasts. According to SEC regulations, annual earnings forecasts for companies listed in Tehran the Stock Exchange are mandated but manager have considerable latitude over the numbers they release. In this study has been investigated the ...
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This paper studies the behavior of managers in annual Earnings Forecasts. According to SEC regulations, annual earnings forecasts for companies listed in Tehran the Stock Exchange are mandated but manager have considerable latitude over the numbers they release. In this study has been investigated the management bias in annual earnings forecast and effect of the three-variable: past performance, management approach in last year's forecast earnings, and type of ownership of listed companies in Tehran Stock Exchange. In this study Management bias is measured by using two criteria, forecast innovation and forecast errors. The sample includes the 1135announcements of annual earnings forecasts during the period 1386-1390 (Iranian Calendar). The analysis performed shows, managers initial forecast optimism is inversely related to firm performance, and is more pronounced for firms with higher levels ownership, and with a history of forecast optimism.
H. Khaleghi Moghadam; F. Karami
Volume 6, Issue 23 , October 2008, , Pages 19-41
Abstract
This paper aims to evaluate the earning forecasting model based on cost variability and cost stickiness in comparison to other forecasting models. Cost stickiness means that the rate of decrease in costs while sale declines is less than the rate of increase in costs while sale grows. In other ...
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This paper aims to evaluate the earning forecasting model based on cost variability and cost stickiness in comparison to other forecasting models. Cost stickiness means that the rate of decrease in costs while sale declines is less than the rate of increase in costs while sale grows. In other word, costs are sticky downward. The data used in this research was gathered from 85 companies accepted in Tehran stock market from 1994 to 2004. To analyze the data two regression techniques called simple and rolling methods and also confidence coefficient R2 and F test are used. The results indicate that the power of the earning forecasting model based on cost variability and cost stickiness is significantly more than the others'.
Mohsen Khoshtinat; Morteza Akbari
Volume 5, Issue 19 , October 2007, , Pages 21-49
Abstract
Different information introduced to the market by the listed companies affect share prices in the capital market. Some are used for forecasting and estimation, so its credibility and authenticity is under question. A major problem almost all managers are facing with is that to what degree their earnings ...
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Different information introduced to the market by the listed companies affect share prices in the capital market. Some are used for forecasting and estimation, so its credibility and authenticity is under question. A major problem almost all managers are facing with is that to what degree their earnings forecast is reliable to the capital market, how they are affected by different variables, and how authenticity can be augmented. This article empirically tries to investigate the effect of the factors reviewed by foreign scholars, on Tehran Stock Exchange. The research hypotheses are based on evaluating five factors including type of information (positive or negative), deviation in forecasting (managers credibility), forecast timing, size of the companies, and adjustment or non-adjustment of the forecasted information. Considering the volatility of the share price at the time of projected profit declared by the negative information (a lower forecasted earning) severely makes share price sensitive; unlike positive information which does no draw as much attention of shareholders and brokers as the negative information. Secondly, the size of the listed companies has a wider effect on the investors to accept the projected profit. Thirdly, the materialization of the past forecasts affects acceptance of the future forecasts as well. Fourth, medium-term forecasts values more reaction on share prices rather than the long-term ones. And finally adjustment of the forecasts has no effect on the upcoming forecasts. In short, this study tries to raise the awareness concerning how managers can link their projected future profits to the market.
Saber Sheri; Mohammad Marfou
Volume 5, Issue 17 , April 2007, , Pages 63-104
Abstract
There are significant differences in disclosure of information among firms. Identification of factors affecting management in formation disclosure is a useful research area and wide variety of users such as: market pol icy makers, investors and academicians could take advantage of the ...
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There are significant differences in disclosure of information among firms. Identification of factors affecting management in formation disclosure is a useful research area and wide variety of users such as: market pol icy makers, investors and academicians could take advantage of the results.
Earning forecast is important information that firms usually disclose. Corporate governance improves the performance of companies and their quality of disclosure.
This empirical research investigated the relationship between properties of management earning forecast, with two important corporate governance mechanism; outside directors and institutional investors.
Our sample is selected from listed companies in Tehran Stock Exchange (TSE) for a period of the years 2003 to 2005. The percentage of outside directors and firms aggregated common stock held by institutions are independent variables. Properties of management earnings forecasts are dependent variables. Forecast precision, forecast timeliness, forecast bias and the number of forecasts that is revised are proxies for those properties. The control variables are: size of the firm, the firm's auditor. the ratio of market to book value of the common equity, number of days between the forecast date and fiscal ending period date and good or bad news.
We established hypotheses based on the above variables and tested them by using single and Multiple Regression Analysis and Mann-Whitney U.
The result showed that; there is no significant relationship between two corporate governance mechanisms and proper ties of management earnings forecasts. The result as a whole doesn't discern any significant relationship between outside directors and in situational investors to precision, bias, timeliness of earning forecasts and revise on them.
Seyed Majid Shariatpanahi; Ghasem Ghasemi
Volume 3, Issue 11 , October 2005, , Pages 209-225
Abstract
In this research the investigator tries to predict the companies’ EPS by comparing the most famous forecast with management foresees companies’ budget. For this goal, among different types of forecasting methods, the most famous of them (Box-Jenkins method) is chosen and based on economic ...
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In this research the investigator tries to predict the companies’ EPS by comparing the most famous forecast with management foresees companies’ budget. For this goal, among different types of forecasting methods, the most famous of them (Box-Jenkins method) is chosen and based on economic evaluation methods, appropriate model will be suited. It is clear that as per correctness test methods and evaluation tests the above mentioned model should be confirmed. In this manner a suitable forecasting model shall be obtained. Then, by Wilkinson rank sum test, the suited forecast model with management forecast will be situated along each other and by calculating their deviation from real EPS from the point of closing to the reality will be judged.
The result of this research shows that the EPS mentioned by management in the companies’ budget is closer to reality than the EPS foresee by Box Jenkins time series model. In more clear word, the declared EPS by manager is more real compare to the best time series forecast models.
Hamid Khaleghi Moghadam; Mahmood Bahramian
Volume 3, Issue 10 , July 2005, , Pages 1-28
Abstract
Companies going public in Iran include a forecast of next year's profit in their prospectuses. Investors use this information for their future decision. Accuracy of the forecast is crucial because it seems to be a credible signal for long-term performance of stocks.
In this study we ...
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Companies going public in Iran include a forecast of next year's profit in their prospectuses. Investors use this information for their future decision. Accuracy of the forecast is crucial because it seems to be a credible signal for long-term performance of stocks.
In this study we examine the accuracy of management profits forecasts contained in prospectuses of companies newly listing on the Tehran Stock Exchange. For that reason four different forecast error metrics, forecast error, absolute forecast error, squared forecast error and superiority of management forecast are considered.
The interesting feature in this paper is the mandatory status of Tehran market for the disclosure of earning forecast in the prospectuses of the companies and the motivation is that there is no previous literature covering forecast earning accuracy. Data set consists of 81 IPOs, which were floated, in the Athens Stock Exchange during March 2000 to February of 2002.
In order to test a number of company specific characteristics, for the accuracy of Tehran IPO management earnings forecasts we conduct a regression analysis .We apply a cross sectional model to explain variations in accuracies but it has very weak significant power. Our results suggest that investors are able to anticipate forecast errors at the time of listings. Investigation on independent variables, influencing the forecast accuracy show that three factors named horizon of the IPO' (HOR), Economic Condition (ECON), Age of Firm (AGE) are significant determinants.
Hamid Khaleghi Moghaddam; Ali Rahmani
Volume 1, Issue 1 , April 2003, , Pages 109-142
Abstract
This Paper Provides empirical evidence on the predictive ability of nonearning annual report numbers under an earning prediction approach.
The most studies report that earning were generated by a random walk Process. The paper investigates information Content of accounting items. The Logit prediction ...
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This Paper Provides empirical evidence on the predictive ability of nonearning annual report numbers under an earning prediction approach.
The most studies report that earning were generated by a random walk Process. The paper investigates information Content of accounting items. The Logit prediction models were estimated based on pooled data set of 71 firms over the period 1371-79.
The result demonstrates the predictive power of accounting item to explain and Forecast of earnings. However the predictive Performance model in the period 1377-79 was not significantly different from random walk model; except in 1378.
Gross margin ratio, growth in Assets per share, growth in Assets, growth in Sales to assets ratio, total debt to total assets, pretax income to sales, growth in net income to sales, growth in operating expense to sales and changes in return on equity, correlated with earnings and these explanatory variables whose estimated coefficients had a wald Statistic significantly different from zero at the 10% level.
The finding suggest that a firm's nonearings annual report numbers contain information concerning the direction of its next year's earnings change.
