Just Say No to Wall Street: Putting a Stop to the Earnings Game
AbstractCEOs and CFOs put themselves in a bind by providing earnings guidance and then making decisions designed to meet Wall Street's expectations for quarterly earnings. When earnings appear to be coming in short of projections, top managers often react by suggesting or demanding that middle and lower level managers redo their forecasts, plans, and budgets. In some cases, top executives simply acquiesce to increasingly unrealistic analyst forecasts and adopt them as the basis for setting organizational goals and developing internal budgets. But in cases where external expectations are impossible to meet, either approach sets up the firm and its managers for failure. Copyright Copyright (c) 2010 Morgan Stanley.
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Bibliographic InfoArticle provided by Morgan Stanley in its journal Journal of Applied Corporate Finance.
Volume (Year): 22 (2010)
Issue (Month): 1 ()
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- Joseph Fuller & Michael C. Jensen, 2002. "Just Say No To Wall Street: Putting A Stop To The Earnings Game," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(4), pages 41-46.
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