Implications For Future Performance Research Articles

Time-Series Analysis and Forecasting of S&P500 Index Based on ARIMA and ETS Model

The study embarks on an insightful journey into the world of stock indices through the deeper understanding of time series analysis application, especially during the special period of oil price volatility. The goal of this paper is to utilize sophisticated statistical models, including Autoregressive Integrated Moving Average (ARIMA) and Exponential Smoothing (ETS), to extract meaningful information from historical stock index data of S&P500 by Yahoo Finance, enhancing predictive accuracy and operating forecasts to inform strategic decision-making. In addition to the prediction results, the study also compares the forecasts of the two models through some values, and concludes that the prediction effect of the ARIMA model is better than that of the ETS model. The reason behind this result has a lot to do with the processing of the data itself and the fit of the models. For S&P500 during the period of the study, the ARIMA model’s prediction result is better. The insights derived from this analysis are expected to empower investors, researchers, and market analysts with a deeper understanding of the stock index’s past behavior and its implications for future performance.

The Future Performance Implications of Non-GAAP Firms’ Investments

The Future Performance Implications of Non-GAAP Firms’ Investments

Effective Communication Management: A Factor for Development of International Companies in Our Day

The purpose of communication management at company level is to create and exploit all the categories of company assets by building up the communication space in a way to achieve the company competitiveness. Therefore, the quality of communication management in companies has become an indicator of their ability to create an internal and external environment that will help them gain the necessary market advantages. 
 The article contains results of an analysis of the phenomenon of communication management and causes of disruptions of effective communications in international companies. A review of previous research shows that international companies operating in multicultural environments face communication barriers affecting the performance of international partners. But once built in a right manner, communication management enables to overcome such cross-cultural barriers. When the peculiarities of cross-cultural communications are accounted for, it will allow to predict the behavior of foreign partners and avoid mistakes in management of international organizations and projects. Two aspects have critical importance for the prevention or quick settlement of conflicts: (i) a cautious and balanced strategic policy of company management, the readiness to grasp the causes of conflicts and change policy schemes to achieve a reasonable compromise, flexibility and adaptability of an organizational structure; (ii) deep awareness of the cultural environments in which an organization operates, and of the cultural origins of its staff. 
 It is concluded that due consideration for the cultural diversity can strengthen mutual understanding between the partners in communication. It is shown that communication management has impact on the organizational communication climate, whereas the latter have implications for future performance of international companies. The organizational communication climate is a proxy of the relationship between communication management and prevention of conflicts.

Comparison of respiration rate and electron transport system (ETS) enzyme-mediated reduction assay of the invasive copepod Eurytemora carolleeae Alekseev & Souissi, 2011 (Calanoida, Temoridae) in Green Bay, WI, U.S.A.

Abstract Anthropogenic activities can cause important changes in aquatic ecosystems, such as warming due to climate change, nutrient loading from agricultural runoff and urban areas, and decreased concentrations of oxygen in bottom waters. These changes may lead to impacts on both organism performance and ecosystem functionality. Studying planktonic species that form an aquatic ecosystem’s foundation is an important step towards understanding the entire food web and predicting how it may respond to a changing environment. One important planktonic species in the Laurentian Great Lakes is the invasive calanoid copepod Eurytemora carolleeae (formerly considered part of the Eurytemora affinis species complex). This study analyzes the metabolic activity of E. carolleeae from Green Bay, Lake Michigan, U.S.A. using two different methods, over a range of temperatures from 9 to 26°C. Total oxygen consumption was measured directly using a micropulse oxygen probe system, and the activity of aerobic metabolic enzymes in the electron transport system (ETS) was quantified using in vitro reduction of iodonitrotetrazolium chloride (INT). Respiration rate of E. carolleeae increases approximately linearly from 9 to 26°C. Measurements of ETS activity indicate that the copepod’s metabolic enzymes have an Arrhenius activation energy of 46.5 ± 15.6 kJ/mol with a thermal maximum between 22 and 26°C. Overall, E. carolleeae ETS rates increased by approximately 7% per °C over the range 9 to 22°C. This thermal limit has implications for future performance of this species, as the combination of higher temperatures and disappearance of oxygenated colder-water refuges may limit E. carolleeae’s success in the Green Bay system following warmer climate and increased nutrient conditions.

CEO Turnover and Accounting Earnings: The Role of Earnings Persistence

Although earnings persistence should have a nontrivial impact on chief executive officer (CEO) turnover decisions, prior studies have paid little attention to the role of earnings persistence in CEO turnover decisions. This study examines the effect of earnings persistence on the sensitivity (i.e., the negative relation) of CEO turnover to earnings performance. First, we find that the sensitivity of forced CEO turnovers to earnings performance is greater when earnings are more persistent. We also show that among numerous earnings attributes, earnings persistence is the most direct and dominant attribute in explaining CEO turnover-earnings sensitivity. Further, when the effect of earnings persistence on CEO compensation-earnings sensitivity is weak, the effect of earnings persistence on CEO turnover-earnings sensitivity is stronger, suggesting that the executive discipline system substitutes for the compensation system when earnings persistence is neglected by compensation policies. Overall, our findings suggest that earnings persistence plays a crucial role in CEO turnover decisions by elevating the board’s knowledge on the future performance implications of current earnings. Finally, the role of persistence is even more crucial when it is neglected by executive compensation policies. This paper was accepted by Shiva Rajgopal, accounting.

The Transcriptional Landscape of Polyploid Wheats and Their Diploid Ancestors during Embryogenesis and Grain Development.

Modern wheat production comes from two polyploid species, Triticum aestivum and Triticum turgidum (var durum), which putatively arose from diploid ancestors Triticum urartu, Aegilops speltoides, and Aegilops tauschii How gene expression during embryogenesis and grain development in wheats has been shaped by the differing contributions of diploid genomes through hybridization, polyploidization, and breeding selection is not well understood. This study describes the global landscape of gene activities during wheat embryogenesis and grain development. Using comprehensive transcriptomic analyses of two wheat cultivars and three diploid grasses, we investigated gene expression at seven stages of embryo development, two endosperm stages, and one pericarp stage. We identified transcriptional signatures and developmental similarities and differences among the five species, revealing the evolutionary divergence of gene expression programs and the contributions of A, B, and D subgenomes to grain development in polyploid wheats. The characterization of embryonic transcriptional programming in hexaploid wheat, tetraploid wheat, and diploid grass species provides insight into the landscape of gene expression in modern wheat and its ancestral species. This study presents a framework for understanding the evolution of domesticated wheat and the selective pressures placed on grain production, with important implications for future performance and yield improvements.plantcell;31/12/2888/FX1F1fx1.

Peer Group Choice and Chief Executive Officer Compensation

We examine the selection of peer groups that boards of directors use when setting CEO compensation. The challenge is to ascertain whether peer groups are selected to (i) attract and retain executive talent and/or (ii) enable rent extraction by inappropriately increasing compensation. We find that the inferences in prior research are based on questionable methodological choices and do not generalize with an expanded sample. After addressing these concerns, we find that, on average, excess peer compensation has a negative association with future firm operating performance. However, significant variation in CEO talent and corporate governance exists within the cross-section of firms. The negative association between excess peer compensation and future performance is mitigated when the firm has a high level of CEO talent, and exacerbated when the firm has low-quality corporate governance. Thus, the economic consequences of peer-group choice are highly contextual. In general, we find that talent motivations explain more of the variation in the future performance implications of peer-group choice than corporate governance.

THE PHYSIOLOGIC STRESS RESPONSE OF LEARNERS DURING CRITICAL CARE PROCEDURES: LIVE TISSUE VS SYNTHETIC MODELS

SESSION TITLE: Critical Care 1 SESSION TYPE: Original Investigation Posters PRESENTED ON: 10/10/2018 01:00 PM - 02:00 PM PURPOSE: The optimal level of physiologic stress during training is unclear, especially when learning procedures typically performed during a crisis. Extreme levels of stress can be deleterious to performance, but stress inoculation through activities that approximate the unease encountered in real-world scenarios has been shown to subsequently enhance performance. High-fidelity simulation offers many advantages, including broad exposure to procedures, their complications, and the opportunity for repetitious learning in a non-clinical setting. The stress of learners undergoing simulation events is a growing field of interest. Proponents of training with live-anesthetized animals argue the associated stress response cannot be equated with inanimate models, and therefore leads to an inferior learning experience with negative implications for future performance. METHODS: A randomized controlled study of 277 army combat medics was performed comparing procedural training and assessment on a live tissue (LT) goat model versus the best-in-class synthetic training models (STM). Participants were randomized twice, first to train on LT or STM, then to determine whether final assessment would be performed on LT or STM. Simulated procedures included hemorrhage control, needle thoracostomy, tube thoracostomy and cricothyrotomy. Physiologic stress responses of the medics were evaluated during the final assessment. Salivary amylase and cortisol levels were measured at baseline, t+5, 15, 25, 35, and 45 minutes post event start. RESULTS: No significant differences were seen for peak stress response of salivary cortisol or amylase, regardless of LT or STM method for training or assessment. In addition, the stress response did not correlate significantly with total performance score. CONCLUSIONS: Synthetic models can produce a stress response equivalent to that of live tissue during simulation training. This is the largest study to date indicating synthetic models produce a sufficient immersive and realistic experience for trainees. CLINICAL IMPLICATIONS: Stress inoculation while learning critical medical procedures can be achieved with synthetic models. Training programs may be able to reduce the use of live animals for training without sacrificing educational quality. DISCLOSURES: No relevant relationships by Tyler Bonnett, source=Web Response No relevant relationships by Danielle Hart, source=Web Response No relevant relationships by Jonathan Keller, source=Web Response No relevant relationships by Gregory Rule, source=Web Response Consultant relationship with Olympus Please note: $1-$1000 Added 03/02/2018 by Robert Sweet, source=Web Response, value=Consulting fee Owner/Founder relationship with Simagine Health Please note: $1-$1000 Added 03/02/2018 by Robert Sweet, source=Web Response, value=Ownership interest

Deferred revenue changes as a leading indicator for future financial performance

Purpose The purpose of this paper is to investigate whether deferred revenue changes can serve as a leading indicator for firms listed on China’s stock markets, and whether China’s market participants can appropriately incorporate future performance implications of deferred revenue changes. Design/methodology/approach Empirical/archival/regression analysis. Findings The authors find that deferred revenue changes are positively associated with the next two years’ sales growth, gross profit margin, profit margin, and return on assets, suggesting that deferred revenue changes can serve as a valid leading indicator for future financial performance. The authors also find that Chinese investors tend to underweight future performance implications of deferred revenue changes. Originality/value To the authors’ knowledge, this study is among the first research to examine deferred revenue changes as a leading fundamental indicator and market underreaction to reported accounting information for firms listed on China’s stock markets.

Fair Value Accounting and the Predictive Ability of Earnings: Evidence from the Banking Industry

This paper examines whether fair value adjustments included in other comprehensive income (OCI) can predict future performance in banks. We also examine whether the reliability of these fair value estimates affects their predictive value. Using a sample of bank holding companies, we find that fair value adjustments included in OCI can predict bank earnings both one and two years ahead. However, not all fair value related unrealized gains and losses included in OCI have similar implications for future performance. While unrealized gains and losses on available-for-sale securities are positively associated with future earnings, unrealized gains and losses on derivative contracts classified as cash flow hedges are negatively associated with future earnings. We also find that the predictive value of fair value estimates is enhanced when fair values are measured more reliably. Finally, we show that fair value adjustments recorded in OCI during the 2007-2009 financial crisis were predictive of future profitability, contradicting the criticism that fair value accounting forced banks to record excessive downward adjustments. Overall, our findings support the view of the Financial Accounting Standards Board and International Accounting Standards Board that use of fair value estimates in financial reporting meets their objective of providing decision-useful information about future firm performance.

The Role of Bank Reputation in “Certifying” Future Performance Implications of Borrowers’ Accounting Numbers

ABSTRACTWe investigate the role played by the reputation of lead arrangers of syndicated loans in mitigating information asymmetries between borrowers and lenders. We hypothesize that syndications by more reputable arrangers are indicative of higher borrower quality at loan inception and more rigorous monitoring during the term of the loan. We investigate whether borrowers with more reputable lead arrangers realize superior performance subsequent to loan origination relative to borrowers with less reputable arrangers. We further examine whether certification by high‐reputation lead banks extends to the quality of borrowers’ reported accounting numbers. Controlling for endogenous matching of borrowers and lead banks, we find that higher bank reputation is associated with higher profitability and credit quality in the three years subsequent to loan initiation. We also show that bank reputation is associated with long‐run sustainability of earnings via higher earnings persistence, and debt contracting value of accounting via a stronger connection between pre‐loan profitability and future credit quality. We further document that the enhanced earnings sustainability associated with higher reputation lead banks reflects both superior fundamentals and accruals more closely linked with future cash flows.

Accruals, Growth, and Future Firm Performance

The current debate in the literature about the role of accruals and growth in explaining earnings persistence and future returns is inconclusive. The problem stems from accrual and growth proxies being positively correlated, and neither convincingly subsuming the other in empirical tests. This study identifies a subset of firms for which accruals do not capture growth, thus providing a discriminating test. Specifically, I focus on firms with negative operating cycles and non-cash net working capital balances. These firms typically have declining net working capital as they grow because their business models result in current liabilities increasing faster than current assets. In this setting, high growth firms tend to have negative accruals. Contrary to the growth hypothesis, high growth firms with low accruals experience high future profitability and returns. These findings indicate that accounting distortions embedded in accruals have distinct implications for future performance.

CEO career horizon and tenure: Future performance implications under different contingencies

This paper examines the influence of CEO career horizon and tenure on the future performance of firms. Specifically, we argue that CEOs with shorter career horizons (as measured by their age) will adopt risk-averse strategies that will, on average, adversely influence future firm performance. Further, we argue that at high levels of CEO ownership, this relationship is exacerbated due to the accompanying power that comes with high ownership. In terms of CEO tenure, we propose that CEOs' paradigms will become increasingly obsolete as their tenure increases with this process hurting future performance in dynamic industries. However, such performance declines may not occur in more stable industries. Using a sample of US-based firms from the S&P 500, we find support for our arguments when examining the future Return on Assets of firms. With market-based performance, we find support for only our career horizon arguments.

CEO Career Horizon and Tenure: Future Performance Implications under Different Contingencies

This paper examines the influence of CEO career horizon and tenure on the future performance of firms. Specifically, we argue that CEOs with shorter career horizons (as measured by their age) will adopt risk-averse strategies that will, on average, adversely influence future firm performance. Further, we argue that at high levels of CEO ownership, this relationship is exacerbated due to the accompanying power that comes with high ownership. In terms of CEO tenure, we propose that CEOs’ paradigms will become increasingly obsolete as their tenure increases with this process hurting future performance in dynamic industries. However, such performance declines may not occur in more stable industries. Using a sample of US-based firms from the S&P 500, we find support for our arguments when examining the future Return on Assets of firms. With market-based performance, we find support for only our career horizon arguments.

The Role of Bank Reputation in 'Certifying' Future Performance Implications of Borrowers' Accounting Numbers

We investigate the role played by the reputation of lead arrangers of syndicated loans in mitigating information asymmetries between borrowers and lenders. We hypothesize that syndications by more reputable arrangers are indicative of higher borrower quality at loan inception and more rigorous monitoring during the term of the loan. We investigate whether borrowers with more reputable lead arrangers realize superior performance subsequent to loan origination relative to borrowers with less reputable arrangers. We further examine whether certification by high reputation lead banks extends to the quality of borrowers’ reported accounting numbers. Controlling for endogenous matching of borrowers and lead banks, we find that higher bank reputation is associated with higher profitability and credit quality in the three years subsequent to loan initiation. We also show that bank reputation is associated with long run sustainability of earnings via higher earnings persistence, and debt contracting value of accounting via a stronger connection between pre-loan profitability and future credit quality. We further document that the enhanced earnings sustainability associated with higher reputation lead banks reflects both superior fundamentals and accruals more closely linked with future cash flows.

The Information Content of Forward‐Looking Statements in Corporate Filings—A Naïve Bayesian Machine Learning Approach

ABSTRACTThis paper examines the information content of the forward‐looking statements (FLS) in the Management Discussion and Analysis section (MD&A) of 10‐K and 10‐Q filings using a Naïve Bayesian machine learning algorithm. I find that firms with better current performance, lower accruals, smaller size, lower market‐to‐book ratio, less return volatility, lower MD&A Fog index, and longer history tend to have more positive FLSs. The average tone of the FLS is positively associated with future earnings even after controlling for other determinants of future performance. The results also show that, despite increased regulations aimed at strengthening MD&A disclosures, there is no systematic change in the information content of MD&As over time. In addition, the tone in MD&As seems to mitigate the mispricing of accruals. When managers “warn” about the future performance implications of accruals (i.e., the MD&A tone is positive (negative) when accruals are negative (positive)), accruals are not associated with future returns. The tone measures based on three commonly used dictionaries (Diction, General Inquirer, and the Linguistic Inquiry and Word Count) do not positively predict future performance. This result suggests that these dictionaries might not work well for analyzing corporate filings.

Relation between the Attributes of Executive Successor and Organizational Performance

Although a dispute if executives’ effect organizational performance is still open, the researchers agree that executive succession becomes a critical event in business organizations. The selection of new chief executive officer (CEO) is an important decision, which has implications for future performance of organization. However, there are no consistent agreements what attributes of executives’ are likely to be associated with organizational success.

Bank Risk, Implied Volatility and Bank Derivative Use: Implications for Future Performance

This paper attempts to distinguish hedging versus speculative derivative usage by U.S. bank holding companies, and whether that has implications for future performance. This is accomplished by implementing a multi-step procedure that relates the implied volatility from traded options on these banks, macroeconomic factors, and off-balance sheet derivatives. Our results indicate that the relationship between risk sensitivity and derivative usage is strongest for interest rate and foreign exchanges activities. Additionally, we demonstrate that speculators outperform hedgers in managing interest rate risk but underperform hedgers in managing foreign exchange risk (US/JPN). There is little difference in performance for the other derivative products, but this is not surprising since the value of these derivative positions are small by comparison.