Business, Management and Accounting
4 years ago

Earnings Components Uncover Corporate Tricks, Empowering Investors to Make Informed Decisions

CIRJE J-Series
"Value Relevance of Earnings Components in the Income Statement"(in Japanese)
Takashi Obinata

Paper Summary

The study looked at how different parts of a company's earnings affect its value to investors. By analyzing how earnings are spread out over time, the researchers found that firms using certain tactics like income smoothing or loss avoidance have earnings that are seen differently by investors. This means that breaking down earnings into different parts can help investors spot when a company might be managing its earnings. Ultimately, using this detailed earnings information can make it easier for investors to make better decisions.

Related papers

Business, Management and Accounting
8 years ago

Companies Inflate Earnings to Boost Stock Returns and Performance

Earnings Management
Value-based Management
Corporate Governance
Business, Management and Accounting
4 years ago

Earnings Remain Key for Sluggish Industries Despite Economic Recession in Japan

Earnings Management
Business, Management and Accounting
4 years ago

Earnings losing value relevance in firm valuation, impacting market perceptions.

Earnings Management
Value-based Management
Corporate Governance
1 view