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The Predictive Value of Expenses Excluded from Pro Forma Earnings

dc.contributor.authorDoyle, Jeffrey T.en_US
dc.contributor.authorLundholm, Russell J.en_US
dc.contributor.authorSoliman, Mark T.en_US
dc.date.accessioned2006-09-11T19:19:28Z
dc.date.available2006-09-11T19:19:28Z
dc.date.issued2003-06en_US
dc.identifier.citationDoyle, Jeffrey T.; Lundholm, Russell J.; Soliman, Mark T.; (2003). "The Predictive Value of Expenses Excluded from Pro Forma Earnings." Review of Accounting Studies 8 (2-3): 145-174. <http://hdl.handle.net/2027.42/47728>en_US
dc.identifier.issn1380-6653en_US
dc.identifier.issn1573-7136en_US
dc.identifier.urihttps://hdl.handle.net/2027.42/47728
dc.description.abstractWe investigate the informational properties of pro forma earnings. This increasingly popular measure of earnings excludes certain expenses that the company deems non-recurring, non-cash, or otherwise unimportant for understanding the future value of the firm. We find, however, that these expenses are far from unimportant. Higher levels of exclusions lead to predictably lower future cash flows. We also find that investors do not fully appreciate the lower cash flow implications at the time of the earnings announcement. A trading strategy based on the excluded expenses yields a large positive abnormal return in the years following the announcement, and persists after controlling for various risk factors and other anomalies.en_US
dc.format.extent314165 bytes
dc.format.extent3115 bytes
dc.format.mimetypeapplication/pdf
dc.format.mimetypetext/plain
dc.language.isoen_US
dc.publisherKluwer Academic Publishers; Springer Science+Business Mediaen_US
dc.subject.otherEconomics / Management Scienceen_US
dc.subject.otherAccounting/Auditingen_US
dc.subject.otherFinance /Bankingen_US
dc.subject.otherPro Forma Earningsen_US
dc.subject.otherCapital Marketsen_US
dc.subject.otherMarket Efficiencyen_US
dc.subject.otherMispricingen_US
dc.titleThe Predictive Value of Expenses Excluded from Pro Forma Earningsen_US
dc.typeArticleen_US
dc.subject.hlbsecondlevelEconomicsen_US
dc.subject.hlbtoplevelBusinessen_US
dc.description.peerreviewedPeer Revieweden_US
dc.contributor.affiliationumUniversity of Michigan Business School, USAen_US
dc.contributor.affiliationumUniversity of Michigan Business School, 701 Tappan Street, Ann Arbor, MI, 48109-1234en_US
dc.contributor.affiliationumUniversity of Michigan Business School, USAen_US
dc.contributor.affiliationumcampusAnn Arboren_US
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/47728/1/11142_2004_Article_5127173.pdfen_US
dc.identifier.doihttp://dx.doi.org/10.1023/A:1024472210359en_US
dc.identifier.sourceReview of Accounting Studiesen_US
dc.owningcollnameInterdisciplinary and Peer-Reviewed


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