Achieving revenue Benchmarks conditional on growth properties
Department(s)
Business Administration
Document Type
Article
Publication Date
5-28-2017
Keywords
Growth, Revenue expectations management, Revenue forecasts, Revenue manipulation, Sustainability
Abstract
This study examines whether certain firm characteristics, specifically growth properties, are associated with the likelihood of achieving market expectations for revenues, as well as which mechanism (revenue manipulation or expectation management) growth firms utilize in order to avoid missing these expectations. The results show that growth firms are more likely to meet or exceed analyst revenue forecasts than non-growth firms. We also find that growth firms are more inclined to manipulate their reported revenues upwards, and less inclined to guide market expectations for revenues downward, in order to meet or beat expected revenues relative to non-growth firms. These findings suggest that window-dressing activities by growth firms may not be sustainable in the long-run and can misguide users of financial statements in their decision-making.
Publication Title
Sustainability (Switzerland)
E-ISSN
20711050
Volume
9
Issue
6
DOI
10.3390/su9060908
Recommended Citation
Son, Dong Hyun and Lim, Dongkuk, "Achieving revenue Benchmarks conditional on growth properties" (2017). Pepperdine University, All Faculty Open Access Publications. Paper 99.
https://digitalcommons.pepperdine.edu/faculty_pubs/99