Profit Forecasts Research Articles

Capacity of Future Earnings´ Prediction of EVA® in the Brazilian Public Companies

This article aimed to verify empirically whether EVA ® provides incremental information for the future profit forecast of Brazilian publicly-traded companies. We used the technique of multiple linear regression with panel data unlike previous studies which using cross-sectional regressions. The results obtained allow rejecting the hypothesis that EVA ® provides incrementally useful information to profit forecast of Brazilian publicly-traded companies. In this work only the variables level of cash flow and accruals level showed statistical significance in the regression model. Furthermore, both represent the dismemberment of earnings per share (EPS) therefore, the results demonstrate that only the EPS is a relevant indicator to the future profit forecast.

The Relationship between Ownership Structure and Earnings Forecast Accuracy between Firms Listed in Tehran Stock Exchange

Earnings forecast by management, investors and other entities are the main sources of information are considered. The significance of this variation depends on the forecast. This deviation is much lower, the prediction is more accurate On the other hand, and there are various sources for predictions. Among their predictions by managers. Therefore of this study was to investigate the accuracy of earnings forecast by managers to examine how directors of respond to specific features of structure property looks to reach this purpose the data of listed companies in Tehran Stock Exchange during the period 1386 to 1391, extracting 498 views using multiple regression data using statistical software E. Views 7were analyzed. The results showed a direct relationship between the independent variables of an institutional shareholder, directors of non-duty, responsibility separation of Managing Director and chairman of the board and the dependent variable is the earnings forecast accuracy the results showed that the variables percent majority ownership percentage ownership concentration and profit forecasts are variable.

Valuing Trial Designs from a Pharmaceutical Perspective Using Value-Based Pricing.

Our aim was to adapt the traditional framework for expected net benefit of sampling (ENBS) to be more compatible with drug development trials from the pharmaceutical perspective. We modify the traditional framework for conducting ENBS and assume that the price of the drug is conditional on the trial outcomes. We use a value-based pricing (VBP) criterion to determine price conditional on trial data using Bayesian updating of cost-effectiveness (CE) model parameters. We assume that there is a threshold price below which the company would not market the new intervention. We present a case study in which a phase III trial sample size and trial duration are varied. For each trial design, we sampled 10,000 trial outcomes and estimated VBP using a CE model. The expected commercial net benefit is calculated as the expected profits minus the trial costs. A clinical trial with shorter follow-up, and larger sample size, generated the greatest expected commercial net benefit. Increasing the duration of follow-up had a modest impact on profit forecasts. Expected net benefit of sampling can be adapted to value clinical trials in the pharmaceutical industry to optimise the expected commercial net benefit. However, the analyses can be very time consuming for complex CE models.

A Dynamic Pricing Method for Goods in Competitive Ecommerce Markets

Dynamic pricing becomes one of the most attractive research topics in the field of ecommerce. In this paper, a novel dynamic pricing model composed retailer’s current profit and its further development is presented. The core of the model is online customer perceived value, and based on which the optimal price equilibrium is provided. To make goods competitive, we adjust function weight by customer lifetime profit forecast and define goods price upper limit by contrasting goods utilities. An example analysis is done to prove that the pricing model is feasible. The paper gives a pricing method workflow to the online enterprises as a pricing practice direction.

The Voluntary Disclosure of Profits Forecasts in UK IPOs Prospectuses, Its Determinants and Implications

This study examines the differences between IPOs that voluntarily disclose earnings forecasts in their prospectuses and those that do not. Using a sample of 166 UK IPOs listed between 1992-2002, we investigate whether forecasters have different firms’ characteristics than non forecasters and whether they perform differently in the short and medium term. The results support the hypotheses that forecasters are firms that are closer to their financial year-end, have lower past profit variability, and higher growth prospect than non forecasters. However, the initial and after market returns of forecasters are not better than that of non forecasters. We also find evidence that optimistic forecasters, ceteris paribus, significantly underperform conservative forecasters and non forecasters in the mid term. Moreover, at the time of going public, investors can use earnings predicted by time series models to asses the performance of forecasters IPOs.

Research and Design of Lead-Acid Battery Manufacturing Execution System Based on Barcode Scanning

This article provides a whole solution to the battery manufacturing execution system (MES) which realizes the complete control of data in battery manufacturing ． MES can improve the manufacturing efficiency. Along with many other functions like quality trace, production planning, quality management, production status monitoring, production tracking, profit forecast predicting profit, recording of exceptional production, raw material management, equipment management, report printing etc ．To remain competitive, manufacturers need MES solutions that meet their industry-specific needs. All the functions turn the battery manufacturing execution system into a production, management, decision-making supporting system which combines work flow, data flow and control flow．

Based on Markov Chain of Agricultural Enterprise Risk Investment Profit Forecast Economic Model

The Markov chain empirical prediction results of economic models based on agricultural enterprises, so as to avoid investment risks. Venture capital investment as a new investment tool, its earnings forecast method is better than the traditional finance investment prediction, which is more complex, more professional. This study constructs a risk investment based on Markov chain prediction of economic model, the fitting matrix method to estimate one-step transfer probability matrix. Finally taking Shaanxi Huasheng Group's actual earnings data as an example, a calculating example is given, which shows the effectiveness of the method. This study presents the economic model for the development of the venture capital industry has certain positive role.

Disaggregating operating and financial activities: implications for forecasts of profitability

Researchers, practitioners, and standard setters emphasize the importance of disaggregating financial statements into operating and financial activities. However, there is a lack of research demonstrating that this disaggregation improves forecasts of profitability. In this study, we consider whether and when the operating/financial disaggregation improves forecasts of profitability. Contrary to the use of an aggregate forecasting approach by most related prior research, we first show that the operating/financial disaggregation only provides forecast improvement over a benchmark model incorporating aggregate information when the components forecasting approach is used. We also compare the operating/financial disaggregation to the unusual/infrequent disaggregation required by US GAAP. We find that the operating/financial disaggregation yields less accurate forecasts than the unusual/infrequent disaggregation. However, when using the components forecasting approach, we find that the combination of both disaggregations improves forecasts of profitability. Finally, we document that the incremental usefulness of the operating/financial disaggregation relative to a benchmark model incorporating aggregate information is a function of growth and accounting conservatism. Overall, our study provides timely evidence concerning how analysts and investors might best use the operating/financial disaggregation for forecasting profitability.

A fuzzy linguistic ontology payoff method for aerospace real options valuation

In this paper, we present a fuzzy linguistic ontology payoff method for the valuation of real options in the aerospace industry. Using real data, we apply the fuzzy linguistic approach to determine the credibility measures and the credibilistic expected value for the fuzzy real options valuation payoff method. This approach is used to obtain a multi-scenario modeling process by envisioning three scenarios: optimistic, most likely, and pessimistic. In addition, our experience with the scenario estimates is premised on results in an operating profit forecast. This forecast corresponds to a plausible outcome within the aerospace licensing maintenance, repair, and overhaul market and provides a decision-making tool. This tool can be utilized for determining real options for project valuation of aerospace licensing revenues based on unit costs, recurring costs, and quantity of units sold.

The revised EU Prospectus Regulation: key changes to the contents of prospectuses

This article discusses significant changes to the disclosure regime for prospectuses in the EU. These stem from amendments to the EU Prospectus Regulation that had to be made as a result of the amendments to the EU Prospectus Directive. The changes to the Prospectus Regulation are set out in two delegated regulations of the EU Commission, one of which entered into force on 1 July 2012, covering significant changes to the format and content of prospectuses, the summary and final terms, and introducing a proportionate disclosure regime for certain rights issues and offerings of small and medium-sized enterprises and companies with reduced market capitalisation. A further regulation is pending, covering changes in relation to consents to be given in the context of retail cascades and the requirement for an auditor's report for inclusion of profit forecasts and estimates. A consultation in relation to convertible and exchangeable securities is also pending that will result in further changes to the Prospectus Regulation.

DO CORPORATE PROFIT FORECASTER HERD?—EVIDENCE FROM CANADA, UK AND THE UNITED STATES

ABSTRACTUsing more than 25 000 corporate profit forecasts for Canada, the United Kingdom and the United States, we find strong evidence of an anti‐herding behaviour. Apparently, corporate profit forecaster intentionally scatter their forecasts around the consensus forecast. We also document that the cross‐sectional heterogeneity of forecasts with regard to anti‐herding translates into cross‐sectional heterogeneity with regard to forecast accuracy. Forecasters who anti‐herd have a substantially higher forecast accuracy that may help to explain the rational bias in macroeconomic forecasting. Copyright © 2012 John Wiley & Sons, Ltd.

Research and Application of Intelligent System of Cost Control and Profit Forecast

In order to meet the requirements of modern enterprises development, perfect mechanism of cost control and profit forecast should be constructed and effective system of cost control and profit forecast should also be established in enterprises. Through collecting various data information of business flow, the intelligent system of cost control and profit forecast analyzes reasons for cost fluctuation based on real-time accounting results, conducts analysis on cost accounting, cost forecast and profit forecast, and also transfers them to decision-making department accurately, timely and effectively. Thus, decision-making department can formulate related decisions and reduce enterprise cost effectively, achieving the goal of profit and improving comprehensively manager's ability of decision-making and analyzing.

Industry Effects on Firm and Segment Profitability Forecasting: Do Aggregation and Diversity Matter?

Academics and practitioners have long recognized the importance of a firm’s industry membership in explaining its financial performance. Yet, contrary to conventional wisdom, recent research shows that industry-specific profitability forecasting models are not better than economy-wide models. This paper re-examines the incremental advantage of industry-specific models. We find considerable industry effects in profitability forecasting. However, the effects are only visible for focused firms. For diversified firms, aggregated reporting at the firm level prevents the effects from being observed. Furthermore, to reliably extract industry patterns from the data, industry classifications have to be sufficiently broad – otherwise industry-specific profitability forecasts are too noisy to improve forecast accuracy. Additional analysis shows that industry effects in profitability forecasting can be profitably exploited by market participants.

Biases in Management Forecasts of Venture-Backed Start-Ups Revisited: Evidence From Internal Due Diligence Documents of VC Investors

This study provides evidence of significant biases in multi-year management forecasts by analyzing a proprietary dataset on venture-backed start-ups in Germany. We find that revenues and expenses are highly overestimated in each of the investigated one- to five-year-ahead planning periods. Furthermore, entrepreneurs underestimate one-year-ahead profit forecasts but clearly overestimate their profit forecasts for all longer-term forecast horizons. Additional analyses reveal that teams with prior management experience issue even more overestimated forecasts and misrepresent their forward-looking information. In contrast, greater asset verifiability and corporate lead investors are associated with lower levels of forecast errors. All key results hold if bias is either measured by traditionally comparing forecasts to ex-post realizations or by using a cross-sectional projection approach based on historical accounting data developed by prior research.

The impacts of product market competition on the quantity and quality of voluntary disclosures

This study examines how firms’ voluntary disclosure decisions are influenced by product market competition. Using separate measures to capture different dimensions of competition, I show that competition from potential entrants increases disclosure quantity while competition from existing rivals decreases disclosure quantity. I also find that competition enhances disclosure quality mainly through reducing the optimism in profit forecasts and reducing the pessimism in investment forecasts. Moreover, I find that the above association is less pronounced for industry leaders, consistent with industry leaders facing less competitive pressures than industry followers.

Disaggregating Operating and Financing Activities: Implications for Forecasts of Future Profitability

Researchers, practitioners, and standard setters emphasize the importance of disaggregating financial statements into operating and financial activities. However, there is a lack of research demonstrating that this disaggregation improves forecasts of profitability. In this study, we consider whether and when the operating/financial disaggregation improves forecasts of profitability. Contrary to the use of an ‘aggregate’ forecasting approach by most related prior research, we first show that the operating/financial disaggregation only provides forecast improvement over a benchmark model incorporating aggregate information when the ‘components’ forecasting approach is used. We also compare the operating/financial disaggregation to the unusual/infrequent disaggregation currently required by U.S. GAAP. We find that the operating/financial disaggregation yields less accurate forecasts than the unusual/infrequent disaggregation. However, when using the ‘components’ forecasting approach, we find that the co bination of both disaggregations improves forecasts of profitability. Finally, we document that the incremental usefulness of the operating/financial disaggregation relative to a benchmark model incorporating aggregate information is a function of growth and accounting conservatism. Overall, our study provides timely evidence concerning how analysts and investors might best use the operating/financial disaggregation for forecasting profitability.

Corruption and International Valuation: Does Virtue Pay?

Using firm-level data from 44 countries, the authors investigate the relation between corruption and international corporate values. The analysis shows that firms from more corrupt countries trade at significantly lower market multiples. The effect is both economically and statistically significant. Furthermore, using a two-stage estimation procedure, the authors show that corruption impacts firm value primarily through lower expected future cash flows, most directly captured by firms’ profitability forecasts. Collectively, the evidence shows that corruption has significant economic consequences for shareholder value.

Investigating the Relationship between Economic Value Added and Cash with Profit Forecast Error

سود حسابداری به طور گسترده در ارزشیابی سهام و ارزیابی عملکرد مدیریت و قراردادهای بدهی مورد استفاده قرار می گیرد. بنابر این پیش بینی سود حسابداری حائز اهمیت است و سرمایه گذاران بر اساس این اطلاعات برای خرید، فروش و یا نگهداری سهام تصمیم می گیرند. آنها با اتکاء به اطلاعات پیش بینی سود هر سهم در قیمت گذاری سهام از آن استفاده می کنند. ارتباط بین پیش بینی سود و ارزش سهام شرکت زمانی حائز اهمیت است که سرمایه گذاران بر این باور باشند که برآوردهای سود صحیح بوده و از دقت لازم برخوردار است. بنابراین خطای پیش بینی سود برای سرمایه گذاران حائز اهمیت است زیرا بر تصمیمات آنها تاثیر می گذارد. خطای پیش بینی سود نقش مهمی در عملکرد بازار ثانویه دارد. هدف اصلی این تحقیق بررسی ارتباط ارزش افزوده اقتصادی و نقدی با خطای پیش بینی سود در مقابل سود عملیاتی و وجوه نقد حاصل از عملیات است. بدین منظور ارتباط خطای پیش بینی سود و تغییرات داده های مربوط به ارزش افزوده اقتصادی و نقدی، سودحسابداری و وجوه نقد حاصل از عملیات برای شرکت های تولیدی پذیرفته شده در بورس اوراق بهادار تهران از سال 79 تا 84 مورد مطالعه قرار گرفته است. نتایج تحقیق با استفاده از برآورد مدل های رگرسیون چند متغیره بر مبنای داده های مقطعی و تلفیقی حاکی از آن است : بر اساس داده های ترکیبی ارزش افزوده اقتصادی و نقدی رابطه مثبت معنا داری با خطای پیش بینی سود دارند ولی سود عملیاتی و جریان های نقدی عملیاتی ارتباط معناداری با خطای پیش بینی سود ندارند. بر اساس داده های مقطعی ارزش افزوده اقتصادی و سود عملیاتی رابطه منفی معنی داری با خطای پیش بینی سود دارند ولی ارزش افزوده نقدی و جریان های نقدی عملیاتی ارتباط معناداری با خطای پیش بینی سود ندارند. محتوای نسبی اطلاعاتی ارزش افزوده اقتصادی بیشتر از سایر متغیرها می باشد.

Sustainability in management accounting: Modelling profit forecasting

An insight into a mathematical model proposed is given in concept with the hope that both academicians and practitioners will progress in achieving forecast accuracy. The paper also attempts to give explanations for and cost effects of imperfect forecasts, an oversight which frequently occurs to management, a necessity in sustainability. Previous observations through pilot study, postal survey, case study and a follow-up survey form as a basis in formulating the mathematical model (Aziz-Khairulfazi, 2004). We use of probability distribution against point forecasts, the cost function and fundamentals of Bayesian methodology in approach towards sustainable performance. The model explains the use of probability distribution against point forecasts, the cost function and fundamentals of Bayesian methodology in approach towards sustainable performance. The paper will give explanations for and cost effects of imperfect forecasts, an oversight which frequently occurs to management. We relate our findings to the service and manufacturing industries and we include an important input to support our modelling, i.e. feed back issue. We conclude our study by highlighting the use of simple modeling that will benefit business organizations, thereafter influence performance and sustainability, an optiont organizations can also apply. This paper offers an innovative approach and a new flavour in examining an operational framework to a business scenario via profit forecasting model.

The Impact of Product Market Competition on the Quantity and Quality of Management Profits and Investment Forecasts

The Impact of Product Market Competition on the Quantity and Quality of Management Profits and Investment Forecasts