Comparing the value relevance of two operating income measures

被引:147
作者
Brown, LD
Sivakumar, K
机构
[1] Boston Univ, Sch Management, Boston, MA 02215 USA
[2] Georgia State Univ, Atlanta, GA 30303 USA
关键词
operating income; pro-forma earnings; value relevance; predictive ability; valuation; information content;
D O I
10.1023/A:1027328418571
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Prior research has shown that pro-forma (recurring operating) earnings reported by managers and analysts are more value relevant than GAAP net income. Since GAAP net income contains many non-operating items that reduce its value relevance compared to operating earnings, comparing the value relevance of GAAP net income with operating earnings unduly favors operating earnings. We show that operating earnings reported by managers and analysts are more value relevant than a measure of operating earnings derived from firms' financial statements, as reported by Standard and Poor's. Our evidence is important because it indicates that operating earnings reported by managers and analysts contain value relevant information beyond that provided by operating earnings obtained by sophisticated users from firms' financial statements.
引用
收藏
页码:561 / 572
页数:12
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