Prior research shows that a higher proportion of accrued relative to cash earnings is associated with lower earnings performance in the subsequent period (Sloan 1996). The result has been widely interpreted as indicative of higher levels of operating accruals relative to cash flows from...

An important goal of accounting research is to provide evidence that improves the analysis of financial statements for predicting future profitability. Research (Sloan 1996; Xie 2001) has found that (1) the persistence of earnings performance depends on the proportions of the cash and accrual...

We document post-event negative abnormal returns to the (implicit) sell recommendations of a group of fundamental analysts. We also find statistically significant deterioration in the financial performance of the identified firms in the year after the recommendations. Together the results are...

In this paper we investigate whether voluntarily disclosed reasons for auditor-client realignments (as encouraged by the SEC) have information content for investors. After classifying realignment reasons into two types - verifiable and non-verifiable, with the latter representing disclosures...

A long history of economic theory suggests that industry membership plays an important role in explaining a firm's financial performance. In this paper we investigate the usefulness of industry benchmarks and industry level analysis for predicting a firm's future profitability and growth....

Most proponents of using profit margins in a forecasting model suggest that unusual items be removed from income to create a quot;corequot; profit margin. We investigate the appropriateness of this assumption over short and long horizons. Specifically, we explore the association between profit...

Prior research shows that negative special items are less persistent than core earnings. However, the allocation of special items to periodic earnings entails significant measurement error which may induce the observed lower persistence. In this paper, we control for this measurement error by...