Access the full text.
Sign up today, get DeepDyve free for 14 days.
Gerald Sondhi, A. Fried, Dov (1993)
The analysis and use of financial statements
S. Penman (2004)
Modeling Sustainable Earnings and P / E Ratios Using Financial Statement Information
B. Lev (1989)
ON THE USEFULNESS OF EARNINGS AND EARNINGS RESEARCH: LESSONS AND DIRECTIONS FROM TWO DECADES OF EMPIRICAL RESEARCHJournal of Accounting Research, 27
RS Kaplan, G Urwitz (1979)
Statistics models of bond ratings: A methodology inquiryJournal of Business, 52
Robert Holthausen, R. Watts (2000)
The Relevance of the Value Relevance Literature for Financial Accounting Standard SettingCorporate Finance and Organizations eJournal
P. Romer (1986)
Increasing Returns and Long-Run GrowthJournal of Political Economy, 94
E. Fama, James MacBeth (1973)
Risk, Return, and Equilibrium: Empirical TestsJournal of Political Economy, 81
P. Fairfield, J. Whisenant, T. Yohn (2003)
Accrued Earnings and Growth: Implications for Future Profitability and Market MispricingAccounting review: A quarterly journal of the American Accounting Association, 78
R. Lipe (1986)
The information contained in the components of earningsJournal of Accounting Research, 24
I. Kama (2009)
On the Market Reaction to Revenue and Earnings SurprisesBehavioral & Experimental Finance (Editor's Choice) eJournal
B. Lev, James Ohlson (1982)
MARKET-BASED EMPIRICAL-RESEARCH IN ACCOUNTING - A REVIEW, INTERPRETATION, AND EXTENSIONJournal of Accounting Research, 20
RW Holthausen, RL Watts (2001)
The relevance of the value-relevance literature for financial accounting standard settingJournal of Accounting and Economics, 31
Narasimhan Jegadeesh, J. Livnat (2006)
Revenue surprises and stock returnsJournal of Accounting and Economics, 41
Sidney Cottle, R. Murray, F. Block, Benjamin Graham, David Dodd (1988)
Graham and Dodd's security analysis
W. Beaver (1982)
MARKET-BASED EMPIRICAL-RESEARCH IN ACCOUNTING - A REVIEW, INTERPRETATION, AND EXTENSION - DISCUSSIONJournal of Accounting Research, 20
S. Penman (2001)
Financial Statement Analysis and Security Valuation
P. Wilson (1987)
THE INCREMENTAL INFORMATION CONTENT OF THE ACCRUAL AND FUNDS COMPONENTS OF EARNINGS AFTER CONTROLLING FOR EARNINGS, 62
PM Dechow, CM Schrand (2004)
Earnings quality
Mark Soliman (2007)
The Use of Dupont Analysis by Market ParticipantsCorporate Finance: Valuation
(2006)
Market reaction to quarterly earnings surprise: The impact of financial statements’ data disclosed with earnings
P. Griffin (2003)
Got Information? Investor Response to Form 10-K and Form 10-Q EDGAR FilingsReview of Accounting Studies, 8
Zhaoyang Gu, Prem Jain, Sundaresh Ramnath (2006)
In-Sync or Out-of-Sync? The Joint Information in Revenues and ExpensesMcDonough: Accounting (Topic)
K. Palepu (1986)
Predicting takeover targets: A methodological and empirical analysisJournal of Accounting and Economics, 8
P. Fairfield, Sundaresh Ramnath, T. Yohn (2009)
Do Industry-Level Analyses Improve Forecasts of Financial Performance?Journal of Accounting Research, 47
James Ohlson (1980)
FINANCIAL RATIOS AND THE PROBABILISTIC PREDICTION OF BANKRUPTCYJournal of Accounting Research, 18
F. Magiera (1997)
Do Stock Prices Fully Reflect Information in Accruals and Cash Flows about Future EarningsCfa Digest, 27
MT Soliman (2008)
The use of DuPont analysis by market participantsThe Accounting Review, 83
P. Fairfield, T. Yohn (2001)
Using Asset Turnover and Profit Margin to Forecast Changes in ProfitabilityReview of Accounting Studies, 6
S. Kothari, I. Thank, Jeffery Abarbanell, Anwer Ahmed, Sudipta Basu, Patricia Dechow, Dan Gode, W. Guay, Charles Lee, Bob Lipe, Michael Mikhail, Jowell Sabino, Jake Thomas, Charles Wasley, Tzachi Zach (2001)
Capital Markets Research in AccountingMIT Sloan School of Management Working Paper Series
James Ohlson, S. Penman (1992)
Disaggregated Accounting Data as Explanatory Variables for ReturnsJournal of Accounting, Auditing & Finance, 7
D. Hirshleifer, Kewei Hou, S. Teoh, Yinglei Zhang (2004)
Do Investors Overvalue Firms with Bloated Balance Sheets?ERN: Experimental Economics (Topic)
(2004)
Earnings Quality. Charlottesville, VA: The Research Foundation of the CFA Institute
Yonca Ertimur, J. Livnat, Minna Martikainen (2003)
Differential Market Reactions to Revenue and Expense SurprisesReview of Accounting Studies, 8
Richard Sloan (1998)
Do Stock Prices Fully Reflect Information in Accruals and Cash Flows About Future EarningsThe Accounting Review, 71
SP Kothari (2001)
Capital market research in accountingJournal of Accounting and Economics, 31
Doron Nissim, S. Penman (2001)
Ratio Analysis and Equity Valuation: From Research to PracticeReview of Accounting Studies, 6
R. Kaplan, Gabriel Urwitz (1979)
Statistical Models of Bond Ratings: A Methodological InquiryThe Journal of Business, 52
Jane Ou, S. Penman (1989)
FINANCIAL STATEMENT ANALYSIS AND THE PREDICTION OF STOCK RETURNSJournal of Accounting and Economics, 11
B Lev (1989)
On the usefulness of earnings research: Lessons and directions from two decades of empirical researchJournal of Accounting Research, 27
I Kama (2009)
On the market reaction to revenue and earnings surprisesJournal of Business Finance and Accounting, 36
Mark Anderson, R. Banker, S. Janakiraman (2003)
Are Selling, General, and Administrative Costs "Sticky"?Journal of Accounting Research, 41
Financial analysis often involves decomposing variables into components, emphasizing the structured hierarchy among ratios. We distinguish between unconditional persistence (a variable’s autocorrelation coefficient), and conditional persistence (the power of a variable’s persistence to explain the persistence of a variable higher in the hierarchy). We argue that a variable’s conditional persistence determines the magnitude of its market reaction, allowing us to predict the relative magnitude of the market reaction to a ratio depending on its hierarchal level in the analysis. We examine the market reaction to the DuPont ratios and find that, while the unconditional persistence of asset turnover (ATO) is larger than that of operating profit margin (OPM), the conditional persistence of OPM is larger than that of ATO. Thus, we predict and find that the market’s reaction to OPM is stronger than that to ATO. We further decompose OPM and ATO into their second-order components and show that the market reaction depends on a component’s conditional persistence.
Review of Accounting Studies – Springer Journals
Published: May 15, 2010
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.