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Loss firms’ annual report narratives and share price anticipation of earnings

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  • Schleicher, Thomas
  • Hussainey, Khaled
  • Walker, Martin

Abstract

We extend prior research into the association between disclosure quality and share price anticipation of earnings by discriminating between firms that report profits and firms that report losses. As a measure of disclosure quality we count the number of forward-looking earnings statements in annual report narratives. To measure the extent to which current share price movements anticipate future earnings changes we regress current stock returns on current and future earnings changes. The coefficients on the future earnings change variables are our measure of share price anticipation of earnings.

Suggested Citation

  • Schleicher, Thomas & Hussainey, Khaled & Walker, Martin, 2007. "Loss firms’ annual report narratives and share price anticipation of earnings," The British Accounting Review, Elsevier, vol. 39(2), pages 153-171.
    • Handle: RePEc:eee:bracre:v:39:y:2007:i:2:p:153-171
    DOI: 10.1016/j.bar.2007.03.005
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    References listed on IDEAS

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