Management Forecasts Essay

Such an intense focus has been placed on quarterly earnings as an indication of a company’s success by everyone from analysts to executives that ethics have for the most part been thrown out the window, sacrificed to the all important number, i.e. earnings per share. This is the theory in Alex Berenson’s book “The Number: How the Drive for Quarterly Earnings Corrupted Wall Street and Corporate America.” This number has become part of a game to be played, a figure to be manipulated – beat the number and Wall Street all but throws a parade, miss it and a company’s stock may be abandoned. Take into account the incentives that executives have to beat the number and one can find plenty of reasons to manage earnings.

We live and work in a condition with challenging opportunities and dramatic uncertain economic environment, especially for managers, must have enough skills and knowledge to manage the changeable business environment. This essay will discuss whether the managers nowadays have the tendency to focus on economic results at the expense of more important things or not, and yes, the managers have the tendency to focus on the expense of more important things, the discussion will be demonstrated from the following concepts: contemporary management challenges—downsizing, workplace diversity, restructuring, globalisation and quality; organisational culture in Australia, managers’ role in managing organisational culture. Managers today must be able

1. This project has a value of 14% of the total assessment. In addition, there is a teamwork

In this research paper the authors want to express their thoughts by stating that how to them earnings reporting pertains to the discovery of information that has not been disclosed by either people or other types of sources and focus towards the negative in this study. In my opinion, the title of the paper itself could have had a different title only because throughout the paper it analyzes negative or bad news rather than really paying attention to both perspectives. Also the paper captures the information or news that occurs by using a three day window in which Quarterly Earnings Announcement (QEA) take place and compares it to a period where it does not take place. Furthermore, in this paper there are three hypotheses that arise

Management is the process of getting tasks done through the use of people. Through management decisions, our team will have one of the leading coffee shops within the BizCafe simulation. Within the management aspect of the company, we must first look at human capital, which are the skills, values, and overall output of an employee and the price at which these facets are worth. The managers of The Grind must delegate tasks through the serving staff of our company. The servers are the face of The Grind, meaning that it will be the servers who will interact to build strong customer relations with the guests of The Grind. However, there should be an efficient number of servers working on the clock at any given time throughout the day; The Grind should strive to always be properly staffed. If the shop is understaffed, customers will experience longer wait times, rushed customer interactions, and an overall subordinate experience; however, if the shop is overstaffed, each individual employee is most likely to give less production, and more importantly, our shop’s payroll will be out of proportion, meaning we will be spending too much money on labor. Wages also effect overall production from the employees. If we pay our servers too little, compared to the competition, we are likely to see less production, unhappy employees, and a large turnover rate. On the other hand, if we pay our servers too much, we risk blowing our weekly labor cap if our sales do not exceed the

Using a sample data comprised 297 NYSE and American Stock Exchange companies for 1977 to 1980-time period, indicating twelve quarterly announcements for each of the company. MacKinlay (1997) utilised 30 companies which comprised into Dow Jones Industrial Index, as a sample to test the impact of quarterly earnings announcements to stock prices. The researcher examined totally 600 quarterly announcements, thus MacKinlay (1997) obtained stock price response separately to bad news, good news and no news cases of earnings per share (EPS) announcements.

Pro forma earnings are earnings which often exclude non-recurring items and are defined by each individual firm rather than under the general accepted accounting principle (GAAP). Pro forma earnings reporting is commonplace in the U.S. (Doyle et al. 2013; Bentley et al. 2016). Items such as nonrecurring gains and losses, depreciation and amortization expenses, write-downs, restructuring and merger costs, stock compensation expenses, and interest expenses are often excluded in pro forma earnings figures. Since many of these exclusions are likely to be transitory in nature, pro forma earnings can be viewed as a better measure of permanent earnings and have received increasing focus recently. Research studies found that pro forma earnings are more value relevant, informative, and better associated with stock prices than GAAP earnings (Bradshaw and Sloan, 2002; Bhattacharya et al.,2003; Brown and Sivakumar, 2003; Entwistle et al., 2010). However, exclusion of the non-recurring items is completely discretionary (Doyle et al., 2013) and managers may use the flexibility to opportunistically influence the market’s perception of the firm’s recurring earnings (Dechow and Schrand, 2004). Managers may have strong incentives to manipulate the reported pro forma earnings to influence investors’ perceptions about the

The extent of opportunity, weakness, loopholes and gaps throughout the FASB GAAP codification on revenue recognition had to be tremendous to be able to effortlessly cook the books, as COSO’s study divulge CEOs and CFOs engineered or perpetrated most financial statement frauds (p.5).

Companies practice earnings management to maximize/minimize earnings or to smooth out fluctuations in earnings (or more commonly known as income smoothing). The motivation can be derived from two sources: (i) contracting incentives, also known as Positive Accounting Theory (PAT), and (ii) capital market incentives, which is to meet earnings

e. IPO profitability changes prior to IPO—Goldman failed to share that the steady drift from three years of profit to one year then down to one quarter. This was sort of a unique legal problem in regards to the profitability standard to one quarter because the financials were available on the dot-coms for the investors to see. Nothing was being disclosed.

Revenue recognition is a primary cause of financial statement restatements, are related to fraudulent behavior, cause market value and capitalization drops, and cause higher enforcement efforts to ensure fairness and integrity in financial statements (Kieso, Weygandt, & Warfield, 2008). Most fraud cases that involve company executives involve revenue recognition is some manner, whether to steal company money and hide the actions or in efforts to meet financial analysts expectations to maintain stock prices and still maintain job positions and bonuses. Each case has led to material misstatements where financial statements had to be restated with SEC, caused market and capitalization drops for the companies, and caused higher enforcement efforts by SEC. And, each case has effected financial statement users and has caused uncertainties in minds of investors, which compromise the companies. When

On November 1, 2011, Diamond Foods Inc.’s (NASDAQ: DMND) unexpectedly disclosed serious discrepancies (possible understatement of accounts payable) regarding its 2011 financial statement reports and as a result announced its decision to delay its acquisition of the Pringles snack business from Procter & Gamble Company (P&G) (NYSE: PG). Naturally, the November 1, 2011 confession caused an immediate plunge of Diamond Food’s stock price, but worse, it triggered several lawsuits from furious investors and created rumors about the future viability of the company. The purpose of this study is to determine the facts and critically analyze the

The first topic area involves an observation of how managers and accountants currently utilize loopholes in FASB accounting standards to present better earnings results to investors, creditors, and regulatory authorities. Many business professionals support earnings management as routine practices that stay within authoritative boundaries, while other business professionals view these activities as unethical. The practitioners of earnings management misapply discretionary judgment to avoid the intent of accounting standards. In his speech The Numbers Game, on earnings manipulation, Arthur Levitt listed five, accrual-based earnings management practices: (a) “big bath” restructuring charges, (b) creative acquisition accounting, (c) “cookie jar reserves”, (d)

When someone has an idea to create an organization, be it a business to generate income or a non-profit designed to help others, the long-range goals are to not only survive, but to continue in a way that is not only beneficial to the stake holders, but also to those that are served by the business. It is never a thought that the endeavor should be started to fail, at least in most cases. Unfortunately, there are many aspects to continued growth and development beyond those that plan on the expansion of the consumer base and increase of production. Much as developing a business plan, strategic forecasting aids in developing long-range plans and considers the ‘what-ifs’ that any organization can encounter and in fact, often looks to the problems that seem implausible or even ridiculous (Hines and Bishop, 2015, p.19). As a professional presenting to an organization there are many different aspects of the business to consider but the most important is being able to integrate new ideas and processes into the present vision, mission and goals of the company (Hines and Bishop, 2015, p.39). In doing so it is possible to present information that is truly uncomfortable along with undesirable outcomes to jump-start the process of a cultural shift within the organization (Hines and Bishop, 2015, p.307-308).

In the underlying paper the author re-examines the conservatism principle and its asymmetric effects on earnings. With samples consisting of all firm-year observations from 1963 to 1990 with returns data on the CRSP NYSE/AMEX Monthly files and respective accounting data on the COMPUSTAT Annual Industrial and Research files, he formulates and tests four major hypotheses to find evidence for his predictions. At first he chracterizes “conservatism in accounting as the more timely recognition in earnings of bad news regarding future cash flows than good news”.1 In his first hypothesis he predicts a more sensitive response of earnings towards bad news in comparison to good news, proxied by negative and positve annual stock returns. His second prediction is that earnings are more timely than cash flow, indicating a stronger association of accruals to conservative accounting effects. Hypotheses three and four account for a test on the