Matching Items (16)
Description
While credit rating agencies use both forward-looking and historical information in evaluating a firm's credit risk, the role of forward-looking information in their rating decisions is not well understood. In this study, I examine the association between management earnings guidance news and future credit rating changes. While upward earnings guidance is not informative for credit rating changes, downward earnings guidance is significantly and positively associated with both the likelihood and speed of rating downgrades. In cross-sectional analyses, I find that downward guidance is especially informative in two important circumstances: (i) when a firm's current credit rating is overly optimistic compared to a model predicted rating, and (ii) when the relevance or reliability of alternative information sources is lower. In addition, I find that downward guidance is associated with lower future cash flows, as well as a higher volatility of future cash flows. Overall, the results are consistent with credit rating agencies incorporating voluntary bad news disclosures into their decisions about whether and when to downgrade a firm.
ContributorsLin, An-Ping (Author) / Hillegeist, Stephen (Thesis advisor) / Hugon, Jean (Thesis advisor) / Call, Andrew (Committee member) / Dhaliwal, Dan (Committee member) / Arizona State University (Publisher)
Created2015
Description
By the year 2021, the gift card market is expected to grow to more than 200 billion dollars. Gift cards are extremely popular among consumers and retailers. They are the most requested gift of the holiday season. They are popular for retailers because gift card sales mean more first time customers, more returning customers, and more money spent in their stores. The growth of gift cards has been very rapid since their introduction by Blockbuster Entertainment in 1994. As the gift card market has increased, so too has gift card breakage. According to FASB ASC 405-20-40-3 gift card breakage is, "the portion of the dollar value of prepaid stored-value products that ultimately is not redeemed by product holders for cash or not used to purchase goods and/or services". The average consumer may contribute to gift card breakage by not using the full dollar amount of their gift card, or by losing the gift card and therefore not redeeming it. For 2011, breakage was expected to be around two billion dollars, roughly two percent of all gift cards purchased. Gift card breakage is free money for the retail companies. They are able to recognize the breakage as revenue without having to give up merchandise or services. Recently, abandoned property laws have minimized the profits on gift card breakage for large retailers. In states where abandoned property laws include gift cards, retailers have been forced to turn over the cash from their unused gift cards. These laws are going to have an effect on many large retailers as some recognize tens of millions of dollar in gift card breakage income but will no longer be able to do so.
ContributorsClasen, Jeffrey Steven (Author) / Call, Andrew (Thesis director) / Huston, Janet (Committee member) / School of Accountancy (Contributor) / WPC Graduate Programs (Contributor) / Barrett, The Honors College (Contributor)
Created2016-05
Description
When making investment decisions many different indicators are taken into consideration before picking a stock/corporation to invest in (retail or institutional). Traditionally these indicators tend to be financial measures such as earnings per share, price to earnings ratio, price to book value ratio, dividend yield/payout ratio, etc. Often these indicators do not take into consideration the actual running intricacies of a company as they are simply based on historical financial statements, thus limiting an investor's decision-making ability. In this paper I analyze several companies stock performance to see if analyzing operational factors such as supply chain management before making an investment decision would have resulted in a profitable investment and thus prove as a reliable investment indicator. To do this I focused my analysis over a period of 5 years on two companies within three different industries; Fast Food, Processing, and Ecommerce. These industries were selected as the nature of their businesses require intensive supply chains thus this strategy would be most applicable to them as opposed to a software or IT company. Of the two companies selected from each respective industry one company would be listed/analyzed in Gartner's ranking of the "Annual Supply Chain Top 25" while the other company would not be. This Gartner ranking would serve as a measure of whether or not a company had a good supply chain. These companies then had their traditional financial metrics evaluated to see if supply chain analysis indirectly encapsulated some of these metrics as well. The goal of this analysis was to find if there was a strong correlation between companies listed on Gartner's rating scale and strong stock performance. If this was true this would suggest that there is a benefit to be captured by investors through using supply chain analysis as an indicator when making investment decisions.
ContributorsThompson, Tyler Thomas (Author) / Kellso, James (Thesis director) / Smith, Geoffrey (Committee member) / Department of Finance (Contributor) / Department of Supply Chain Management (Contributor) / Barrett, The Honors College (Contributor)
Created2018-05
Description
As an accounting major entering the field of financial auditing, I have learned how important the understanding and knowledge of ethics are. I have also learned how often there are grey areas that can cause a generally honest and ethical person to make a not-so-ethical choice. Due to the prevalence and difficulty of such situations involving ethical matters in the workplace, legislation has been put in place such as the Sarbanes-Oxley Act and the Whistleblower Protection Act. I believe the knowledge of such legislation combined with a knowledge of ethical skepticism can not only better the accounting industry, but better the business industry as a whole. This belief led to conducting this study, which aims to identify the impact of whistleblowing and ethics education on undergraduate business students and their likelihood to blow the whistle and analyze ethically ambiguous scenarios with greater skepticism. Through a survey including true or false questions and ethically ambiguous scenarios to be rated on a Likert scale, data was gathered for analysis. Data was divided into three groups for response comparison: accountancy students with Accounting 360: Ethics for Professional Accountants (ACC 360) complete, accounting students with ACC 360 incomplete, and non-accountancy students without ACC 360. The analysis provided some statistically significant responses where students who had completed an accounting ethics course were more likely to blow the whistle and rate a scenario as unethical over students who had not completed the course. However, following survey analysis and research on prior studies, further research is needed to determine more definitively the impact of such education. The data analysis and overall research collected allowed me to form conclusions on whistleblowing and ethics education in undergraduate studies. With the prevalence of ethical dilemmas and fraudulent behavior in the workplace, such a constructive ethical framework and whistleblowing behavior can be taught to improve the likelihood of blowing the whistle and determining ethical dilemmas as unethical. This leads to the proposal that all business students, not just accountancy students, be required to complete a business ethics course for the betterment of our professional careers.
ContributorsIkuma, Olivia R. (Author) / Call, Andrew (Thesis director) / Cassidy, Nancy (Committee member) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2018-05
Description
The goal of this paper is to document a relation between the price of a company's stock and release of public information. I examine how accounting scandals and earnings reports change the price of a company's stock. I run my data through EVENTUS and check for statistical significance. If there is a statistical significance, then it can be stated that accounting information matters. The test results from my study revealed that there was no statistical significance between accounting scandal and stock market prices but there did exist a positive correlation between surprise earning announcements and stock market prices.
ContributorsWollaston, Millicent Mary (Author) / Smith, Geoffrey (Thesis director) / Call, Andrew (Committee member) / School of Mathematical and Statistical Sciences (Contributor) / School of Accountancy (Contributor) / Barrett, The Honors College (Contributor)
Created2016-12
Description
The pharmaceutical industry is heavily regulated. This regulation results in a high number of recalls in this industry compared to other industries. The pharmaceutical industry is subject to high regulation because of the harmful effects pharmaceuticals can have on consumers. In this paper I examine the valuation effects that a drug recall has on both the recalling firm and the recalling firm's rivals. I perform an event study analysis on the data. I show that there exists a statistically significant negative effect for a drug recall on the recalling firm's market value immediately surrounding the announcement. Additionally, there is a statistically significant positive effect for a drug recall on the recalling firm's rivals after the announcement.
ContributorsPaulos, Erica Marie (Author) / Hertzel, Michael (Thesis director) / Smith, Geoffrey (Committee member) / Department of Finance (Contributor) / Barrett, The Honors College (Contributor)
Created2015-12
Description
This project focuses on the importance of understanding culture in business. It is a cultural analysis of emphasis on work, happiness, and success in business. My topic came about through my own personal experience with multiple cultures, and my curiosity as to whether or not I could draw a conclusion supporting "living to work" or "working to live" as a superior way to live.
ContributorsDemetriades, Sabrina (Author) / Smith, Geoffrey (Thesis director) / Drummond, Rivadavia (Committee member) / Barrett, The Honors College (Contributor) / Department of Management and Entrepreneurship (Contributor) / Department of Finance (Contributor)
Created2023-05
Description
Significant efforts to catalogue and record the wave of global business retreats from the escalation of the Russo-Ukrainian war by Russia in February 2022 were made by researchers and professors in the Yale School of Management. This paper analyzes the statuses of these firms through historical publications of the Yale database and attempts to explain the likelihood of a business retreat through many factors, such as industry sector and country of origin. Taking into consideration the grading scale proposed by the Yale School of Management, companies within the Information Technology sector, and companies originating within the U.S. had the highest percentage of eventual “A” ratings within their groups. Statistical tests meant to analyze the stock market reaction to the public companies that were given “F” designations by the Yale School of Management saw that U.S. companies had a lower return than the S&P 500 on average on 2/24/22, whereas companies within the Consumer Staples sector outside of the United States were seen to have had positive returns on 2/24/22. The paper also provides analytics detailing the scope of the corporate exodus from Russia based off of information provided by the Yale School of Management and creates inquiries that may be beneficial to additional research on the topic.
ContributorsSuchanek, Michal (Author) / Simonson, Mark (Thesis director) / Smith, Geoffrey (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor)
Created2023-05
ContributorsSuchanek, Michal (Author) / Simonson, Mark (Thesis director) / Smith, Geoffrey (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor)
Created2023-05
ContributorsSuchanek, Michal (Author) / Simonson, Mark (Thesis director) / Smith, Geoffrey (Committee member) / Barrett, The Honors College (Contributor) / Department of Finance (Contributor)
Created2023-05