this paper takes fundamental analysis research beyond the spatial and temporal bounds of previous studies. it was investigated that how detailed financial statement data enter the decisions of market makers by examining how current changes in the fundamental signals chosen can provide information on subsequent earnings changes. using tehran stock exchange’s firms data from 2003 to 2012, the rol...

Earnings manipulation has become a widespread practice for US corporations. However, most studies in the literature focus on whether certain incentives would facilitate managers to manipulate earnings and there has been little evidence documenting the consequences of earnings manipulation. This paper fills this gap by examining how current accruals affect future earnings (the accrual effect) an...

Managers engage in income smoothing either to communicate private information about future earnings to investors (informativeness hypothesis) or to distort financial performance for opportunistic purposes (opportunism hypothesis). Business cycles and the monitoring role of institutional ownership may affect the earnings informativeness of income smoothing. The purpose of this research is to exa...

On a daily investment decision in a security market, the price earnings (PE) ratio is one of the most widely applied methods being used as a firm valuation tool by investment experts. Unfortunately, recent academic developments in financial econometrics and machine learning rarely look at this tool. In practice, fundamental PE ratios are often estimated only by subjective expert opinions. The p...

While private equity (PE) is expanding rapidly in developing countries, there is little academic research on this subject. In this paper I exploit two new data sources and employ two distinct empirical strategies to identify the impact of PE on Indian firms. I compare the investments made by one of India’s largest PE firms to the investments that just missed (deals that made it to the final rou...

We present strong evidence that high differences of opinion stocks earn lower returns around earnings announcements. The evidence is similar across six different proxies for differences of opinion (earnings volatility, return volatility, dispersion of analysts’ earnings forecasts, number of analysts, firm age, and share turnover). The three-day hedge returns (returns on low minus high differenc...

This study links the trend in two earnings quality metrics: 1) the standard deviation of residuals from the Dechow and Dichev (2002) model, and 2) squared residuals from the Jones (1991) model to firm age (defined using data about firm incorporation/founding dates). The results reveal the significant increasing trends in both measures during the 1962-2006 period are related to the dramatic decr...