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dc.creatorBratten, Brian Michael
dc.date.accessioned2009-10-16T18:04:30Z
dc.date.available2009-10-16T18:04:30Z
dc.date.created2009-08
dc.date.issued2009-10-16T18:04:30Z
dc.identifier.urihttp://hdl.handle.net/2152/6551
dc.descriptiontext
dc.description.abstractThis dissertation examines the general research issue of whether the components of earnings are informative and specifically 1) how analysts consider earnings components when predicting future earnings and 2) whether the information content in, and analysts’ use of, earnings components have changed through time. Although earnings components have predictive value for future earnings based on each component’s persistence, extant research provides only a limited understanding of whether and how analysts consider this when forecasting. Using an integrated income statement and balance sheet framework to estimate the persistence of earnings components, I first establish that disaggregation based on the earnings components framework in this study is helpful to predict future earnings and helps explains contemporaneous returns. I then find evidence suggesting that although analysts consider the persistence of various earnings components, they do not fully integrate this information into their forecasts. Interestingly, analysts appear to be selective in their incorporation of the information in earnings components, seeming to ignore information from components indicating lower persistence, which results in higher forecast errors. Conversely, when a firm’s income is concentrated in high persistence items, analysts appear to incorporate the information into their forecasts, reducing their forecast errors. I also report that the usefulness of components relative to aggregate earnings has dramatically and continuously increased over the past several decades, and contemporaneous returns appear to be much better explained by earnings components than aggregate earnings (than historically). Finally, the relation between analyst forecast errors and the differential persistence of earnings components has also declined over time, indicating that analysts appear to recognize the increasing importance of earnings components through time.en_US
dc.format.mediumelectronic
dc.language.isoengen_US
dc.rightsCopyright is held by the author. Presentation of this material on the Libraries' web site by University Libraries, The University of Texas at Austin was made possible under a limited license grant from the author who has retained all copyrights in the works.
dc.subjectEarnings -- prediction methodsen_US
dc.subjectEarnings -- analysisen_US
dc.subjectBusiness analystsen_US
dc.subjectEarnings componentsen_US
dc.subjectAggregate earningsen_US
dc.subjectAnalyst forecast errorsen_US
dc.titleAnalysts’ use of earnings components in predicting future earningsen_US
dc.description.departmentAccountingen_US
thesis.degree.departmentAccountingen_US
thesis.degree.disciplineAccountingen_US
thesis.degree.grantorThe University of Texas at Austin
thesis.degree.levelDoctoralen_US
thesis.degree.nameDoctor of Philosophyen_US


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