Post Acquisition Earnings Forecasts

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Post-Acquisition Earnings Forecasts

Author : Olivia Huseman
Publisher :
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Post-Acquisition Earnings Forecasts by : Olivia Huseman

Download or read book Post-Acquisition Earnings Forecasts written by Olivia Huseman and published by . This book was released on 2018 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine whether and why the completion of an acquisition affects the bias in managers' earnings forecasts, and three disclosure consequences to understand the source of the bias. I find systematic optimism in acquiring firms' earnings forecasts after an acquisition. Prior research suggests this bias can arise from an intentional, strategic motive by management or an unintentional, psychological bias. To disentangle these possible explanations, I examine whether the bias varies predictably with acquisition characteristics that enhance managers' perceived commitment and control to an acquisition, and whether the bias is associated with subsequent disclosure costs. I find post-acquisition forecast optimism is more likely for diversifying acquisitions, relatively-larger acquisitions and acquisitions management completed despite a negative market reaction to its announcement. In addition, post-acquisition forecast optimism is associated with negative disclosure consequences, including lower analyst responses to future forecasts, greater likelihood of a class action lawsuit dismissal, and greater likelihood of CEO departure. Together, these tests support the argument that managers' optimistic bias is related to unintentional, rather than strategic, optimism regarding the recently completed acquisition.

Properties of Management Earnings Forecasts Following Mergers and Acquisitions

Author : Olivia Grace Huseman
Publisher :
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4.:/5 (1 download)

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Book Synopsis Properties of Management Earnings Forecasts Following Mergers and Acquisitions by : Olivia Grace Huseman

Download or read book Properties of Management Earnings Forecasts Following Mergers and Acquisitions written by Olivia Grace Huseman and published by . This book was released on 2017 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: I study how the properties of management earnings forecasts change after a firm merges with or acquires another company. I find management is more likely to issue a forecast in a merger or an acquisition firm-year than in a non-M&A firm-year. Compared to forecasts issued by the firm in non-M&A periods, the first forecast issued after completing an M&A deal is less likely to be bundled with an earnings announcement and the forecast range is wider, although more likely to be optimistic than non-M&A forecasts. I find the increase in forecast range width and optimism persist in forecasts issued up to the end of the fiscal year but are not present in the initial forecast issued in the subsequent year. Finally, I find variation in M&A experience and M&A type influence management earnings forecast properties. Because prior studies of management forecasts often delete observations containing mergers and acquisitions or simply include the firm's market-to-book, my study informs researchers about how the properties of management forecasts are impacted by the uncertainty from a merger or an acquisition.

Bidder Earnings Forecasts in Mergers and Acquisitions

Author : Amir Amel-Zadeh
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Bidder Earnings Forecasts in Mergers and Acquisitions by : Amir Amel-Zadeh

Download or read book Bidder Earnings Forecasts in Mergers and Acquisitions written by Amir Amel-Zadeh and published by . This book was released on 2019 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study finds that pro-forma earnings forecasts by bidding firms during acquisitions are associated with a higher likelihood of deal completion, expedited deal closing, and with a lower acquisition premium - but only in stock-financed acquisitions. Analysts also respond to these forecasts by revising their forecasts for the bidder upward. However, the benefits of forecast disclosure only accrue to bidders with a strong forecasting reputation prior to the acquisition. Explaining why not all bidders forecast, we document a higher likelihood of post-merger litigation and CEO turnover for bidders with a weak forecasting reputation and for those that underperform post-merger.

Accounting for M&A

Author : Amir Amel-Zadeh
Publisher : Routledge
ISBN 13 : 1000066525
Total Pages : 331 pages
Book Rating : 4.0/5 ( download)

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Book Synopsis Accounting for M&A by : Amir Amel-Zadeh

Download or read book Accounting for M&A written by Amir Amel-Zadeh and published by Routledge. This book was released on 2020-04-29 with total page 331 pages. Available in PDF, EPUB and Kindle. Book excerpt: Spending on M&A has, in aggregate, grown so fast that it has even overtaken capital expenditure on increasing and maintaining physical assets. Yet McKinsey, the leading management consultancy, reports that "Anyone who has researched merger success rates knows that roughly 70% fail". The idea that businesses might be using huge and increasing sums of shareholders’ money for an activity that more often than not leads to failure calls into question the information on which M&A decisions are based. This book presents statistical studies, case material, and standard-setters’ opinions on company accounting before, during, and after M&A. It documents the manipulation of annual accounts by acquirers ahead of share for share bids, biased forecasts of post-merger earnings by bidders, and devices to flatter earnings when recording the deal. It explores the challenges for standard-setters in regulating information flows during and after M&A, and for account-users wishing to learn from financial statements how a deal has affected performance. Drawing on a wide range of international examples, this readable book is targeted not just at accounting specialists but at anyone who is comfortable reading the serious financial press, is intrigued by what is going on in the massive M&A market, and is concerned with achieving better-informed M&A. As such it might be of particular interest to business executives, lawyers, bankers, and investors involved in M&A as well as graduate students interested in researching or learning about the role of accounting in M&A.

Mergers and Acquisitions

Author : William J. Gole
Publisher : John Wiley & Sons
ISBN 13 : 0470135468
Total Pages : 415 pages
Book Rating : 4.4/5 (71 download)

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Book Synopsis Mergers and Acquisitions by : William J. Gole

Download or read book Mergers and Acquisitions written by William J. Gole and published by John Wiley & Sons. This book was released on 2007-07-20 with total page 415 pages. Available in PDF, EPUB and Kindle. Book excerpt: Supplemented annually to keep accountants up-to-date with the latest SEC requirements, this completely revised edition focuses on the entire process of Mergers and Acquisitions-—from planning through post-acquisition integration. Readers will find helpful step-by-step guidance on reviewing an acquisition candidate, setting up and implementing computer system transactions, accounting for the business combination, and tax compliance and regulatory considerations.

Mergers and Acquisitions in a Global Context

Author : Ronald Q. Doeswijk
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Mergers and Acquisitions in a Global Context by : Ronald Q. Doeswijk

Download or read book Mergers and Acquisitions in a Global Context written by Ronald Q. Doeswijk and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a global sample of mergers and acquisitions exceeding a transaction value of USD 1 bln in 1998, this paper examines the short-term reaction of stock prices and analysts' earnings estimates to the announcement of a merger or acquisition. As expected, targets and merging firms outperform the market in the period before, and on the day of the announcement. However, merging firms show a significant underperformance of 0.2% a day immediately after the announcement. Moreover, there is a lack of upward revisions in consensus earnings estimates, as reported by IBES, for the post-announcement years. This suggests that synergies are hard to find and that the outperformance for merging firms in the days up to and including the announcement day was unjustified. For acquirers, which show no abnormal returns before and after the announcement, there is also a lack of upward revisions, but relative to the market average earnings estimates do well. If there are benefits at all, acquirers seem to reap the fruits of their takeover after two years at the earliest.

Accounting Rules and Post-Acquisition Profitability for Business Combinations

Author : Victoria Dickinson
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Accounting Rules and Post-Acquisition Profitability for Business Combinations by : Victoria Dickinson

Download or read book Accounting Rules and Post-Acquisition Profitability for Business Combinations written by Victoria Dickinson and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior studies report a decline or no change in acquirers' profitability after a merger or business acquisition. Those studies, however, do not consider the downward impact on profitability that stems from use of the "purchase accounting" (and in later periods, "acquisition") method for business combinations. Drawing on financial statement data from both targets and acquirers, we estimate the effects of the application of purchase/acquisition method accounting rules on post-acquisition profitability. We find that recognition rules for acquired inventories, deferred revenues, in-process research and development (IPR&D), and depreciation and amortization expense resulting from writing acquired assets up to fair value vis-á-vis purchase/acquisition accounting methods are all important sources of downward pressure in post-acquisition profitability. We find that investors and analysts appear to recognize the effects of IPR&D in assessing post-acquisition profitability of the combined entity. The findings also suggest that investors and analysts do not appear to fully incorporate the accounting effects related to inventories, deferred revenues, and depreciation and amortization expense for post-acquisition profitability.

Stock Payment Acquirer's Pre-Acquisition Earnings Management and Its Post-Acquisition Performance

Author : Pascal Alphonse
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Stock Payment Acquirer's Pre-Acquisition Earnings Management and Its Post-Acquisition Performance by : Pascal Alphonse

Download or read book Stock Payment Acquirer's Pre-Acquisition Earnings Management and Its Post-Acquisition Performance written by Pascal Alphonse and published by . This book was released on 2017 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: For an M&A context, this paper investigates stock payment acquirers' trade-off strategy between accruals-based earnings management (AM) and real earnings management (REM) and it impacts on firm's post-acquisition performance during the period before and the period after the Sarbanes-Oxley Act (SOX). We find that stock payment acquirers, in addition to using pre-acquisition AM, are likely to use REM. Additionally, “mixed-stock” acquirers (stock payments greater than 50% but less than 100%) show more significant AM behaviors than the stock-for-stock acquirers, as shown in the literature, possibly because the disclosure of this strategy involves the latter firms but not for the former. This paper first illuminates “mixed-stock” acquirers' earnings management (EM) strategy. We also find substitution effects between EM methods and that the choice of EM is closely related to an M&A's payment method, the SOX and whether the acquirer made the acquisition(s) shortly before the SOX. Results of the performance analysis suggest that the SOX has negatively impacts the long-term post-acquisition performance and that mixed-stock acquirers and 100% stock-for-stock firms have similar negative post-acquisition performance and market reactions. Furthermore, we discover mixed effects of EM behaviors on post-acquisition performance. The global picture suggests that, for the most part, the financial market cannot effectively perceive a firm's pre-acquisition EM, and it reacts in a "unified" optimistic way to stock payment deals in the short term. In the long term, it associates a firm's future growth to its current performance and that pre-acquisition management no longer matters, though pre-acquisition AM users show better performance.

A Research Agenda for Mergers and Acquisitions

Author : David R. King
Publisher : Edward Elgar Publishing
ISBN 13 : 1035319071
Total Pages : 243 pages
Book Rating : 4.0/5 (353 download)

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Book Synopsis A Research Agenda for Mergers and Acquisitions by : David R. King

Download or read book A Research Agenda for Mergers and Acquisitions written by David R. King and published by Edward Elgar Publishing. This book was released on 2024-05-02 with total page 243 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Research Agenda poses unique questions and perspectives on how to generate impactful research on mergers and acquisitions. Bringing together a mix of established and emerging scholars, it outlines how future research in the field can enable managers to make better decisions and improve mergers and acquisition success.

Earnings Management and the Market Performance of Acquiring Firms

Author : Henock Louis
Publisher :
ISBN 13 :
Total Pages : 45 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Earnings Management and the Market Performance of Acquiring Firms by : Henock Louis

Download or read book Earnings Management and the Market Performance of Acquiring Firms written by Henock Louis and published by . This book was released on 2004 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine the market's efficiency in processing manipulated accounting reports and provide an explanation for the post-merger underperformance anomaly. I find strong evidence suggesting that acquiring firms overstate their earnings in the quarter preceding a stock swap announcement. I also find evidence of a reversal of the stock price effects of the earnings management in the days leading to the merger announcement. However, the pre-merger reversal is only partial. There is evidence of a post-merger reversal of the stock price effects of the pre-merger earnings management. The results suggest that the extant evidence of post-merger underperformance by acquiring firms is partly attributable to the reversal of the price effects of earnings management. The study also suggests that the post-merger reversal is not fully anticipated by financial analysts in the month immediately following the merger announcement. However, consistent with suggestions in the financial press that managers guide analysts' forecasts to quot;beatablequot; levels, the effect of the earnings management reversal seems to be reflected in the consensus analysts' forecasts by the time of the subsequent quarterly earnings releases.

MERGERS AND ACQUISITIONS, SECOND EDITION

Author : RAY, KAMAL GHOSH
Publisher : PHI Learning Pvt. Ltd.
ISBN 13 : 9391818560
Total Pages : 909 pages
Book Rating : 4.3/5 (918 download)

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Book Synopsis MERGERS AND ACQUISITIONS, SECOND EDITION by : RAY, KAMAL GHOSH

Download or read book MERGERS AND ACQUISITIONS, SECOND EDITION written by RAY, KAMAL GHOSH and published by PHI Learning Pvt. Ltd.. This book was released on 2022-12-19 with total page 909 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Covid–19 pandemic-induced downturn and subsequent Russia-Ukraine war have triggered unprecedented financial shock and disruption to the business world. Challenges are unique to each corporation. The forward-looking corporate leaders are fighting now to rebalance risk, profitability and liquidity while looking for new growth opportunities and gaining resilience to come out of the crisis as fast as possible. Mergers and Acquisitions (M&A) being one of the most powerful tools is set to play a bigger role in this direction. It is time now that M&As move at speed and help overcome the present downturn in the economy. Business leaders will have good reasons to leverage M&A as a holistic response to the business and economic crisis. It is in this context that a thoroughly revised edition of the comprehensive book on M&As by Professor Kamal Ghosh Ray becomes so well-timed and significant. The book is an “A to Z” of M&A, ranging from strategy, valuation, legal aspects to integration. The new edition incorporates various new concepts, ideas and thoughts with appropriate discussion in detail. Business valuation has a substantial coverage in the book as the subject, “Valuation” is offered in many academic programmes in universities and business schools. The text is profusely illustrated with many examples and case studies and contains huge number of numerical problems and solutions. Primarily intended as a text for postgraduate students of management and law, the book in its second edition will be of immense value to students of CA, CMA, CFA, CS, etc. and professionals ranging from strategic planners, CFOs, CEOs, COOs, financial analysts, bankers, to venture capitalists, corporate lawyers and business owners. Click on 'Endorsements' tab to check 'What the reviewers say' NEW TO THIS EDITION • Thoroughly revised and updated with the latest trends and relevant regulatory developments in M&A • A dedicated chapter on Numerical Problems and Solutions for easy understanding of complex M&A concepts • Topics like Corporate Restructuring, Disinvestment policy of the government, valuation of startup companies, SPAC (special purpose acquisition companies), Platform Acquisitions, deeper aspects of cross–border M&A and hostile takeover make the new edition contemporary. TARGET AUDIENCE • Postgraduate students of management and law. • Students of CA, CMA, CFA, CS, etc. • Professionals ranging from strategic planners, CFOs, CEOs, COOs, financial analysts, bankers, to venture capitalists, corporate lawyers and business owners.

The Merger Mystery

Author : Geoff Meeks
Publisher : Open Book Publishers
ISBN 13 : 1800647824
Total Pages : 108 pages
Book Rating : 4.8/5 (6 download)

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Book Synopsis The Merger Mystery by : Geoff Meeks

Download or read book The Merger Mystery written by Geoff Meeks and published by Open Book Publishers. This book was released on 2022-06-23 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: Statistical studies over the last forty-five years show that, although there are success stories, very many mergers and acquisitions do not result in the increased operating profits that economics textbooks would lead one to expect. As consultancy McKinsey have put it, ‘Anyone who has researched merger success rates knows that roughly 70% fail’. Yet—mysteriously—M&A activity has boomed across the globe, with a forty-fold increase in deals done each year now compared with four decades ago, in spite of the adverse general evidence. How can it be that talented, energetic, highly skilled, law-abiding, income-maximising participants in the M&A market will often promote mergers that lead to no operating gains, frequently with adverse effects on the wider economy too? Drawing on findings from a wealth of statistical analyses and case evidence from many businesses, the book presents answers to this merger mystery. In a synthesis of ideas from several disciplines, solutions are detected in misaligned incentives, distorted financial engineering and information asymmetry. By revealing how weaknesses at multiple points can interact and cumulate to produce inefficient outcomes, the discussion serves as a corrective to the overwhelmingly positive tone of most commentary on M&A, whilst also advocating changes in participants’ contracts, in taxation, and in regulation which could significantly reduce the number of mergers that fail. Designed to be accessible to a wide readership, the book will be of interest to investors, to M&A practitioners and commentators, to researchers and students of economics, political economy, finance, management and accounting, and—importantly—to policy makers working in these areas.

Post-Acquisition Management in China

Author : Yi He
Publisher : Elsevier
ISBN 13 : 1780632231
Total Pages : 315 pages
Book Rating : 4.7/5 (86 download)

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Book Synopsis Post-Acquisition Management in China by : Yi He

Download or read book Post-Acquisition Management in China written by Yi He and published by Elsevier. This book was released on 2009-10-16 with total page 315 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers and acquisitions (M&As) are a vital strategy for companies attempting to expand and diversify in China. It has been widely accepted that post-acquisition management is critical for acquisition success. Post-Acquisition Management in China provides a systematic examination of post-acquisition management and its impact on performance after takeover in the acquired Chinese companies. It looks at the various aspects of post-acquisition management including the nature and processes of post-acquisition changes, integration and control, and the association between the performance and post-acquisition management. Reports on a pioneering systematic study on post-acquisition management in China. This kind of data has never been published before Based on extensive research data including 20 in-depth case studies and a survey of 300 companies Replicates previous studies of post-acquisition management conducted in the UK and Brazil and offers valuable comparison findings

Forecasts of Earnings by Takeover Bidders

Author : Amir Amel-Zadeh
Publisher :
ISBN 13 :
Total Pages : 66 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Forecasts of Earnings by Takeover Bidders by : Amir Amel-Zadeh

Download or read book Forecasts of Earnings by Takeover Bidders written by Amir Amel-Zadeh and published by . This book was released on 2020 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper analyzes the earnings forecasts issued by bidders' executives in the biggest deals announced on the New York Stock Exchange in the years 1998-2001. It explores the role of the forecasts as an information source for investors at the time of the bid announcement. We investigate the different types of forecast made - precise point forecasts and more general directional forecasts - and the characteristics of the various types of forecaster. We compare forecast with out-turn. The majority of bidders fail to deliver their projections in earnings growth and there is evidence of systematic misjudgement about the future outcome of the proposed acquisitions. We explore the sources of management forecast error and find evidence of managerial over-optimism after controlling for exogenous economic shocks in earnings. Then the paper considers the relationship between forecasts and stock returns at announcement and presents prima facie evidence of market inefficiencies. We develop a model using publicly available information at the time of the bid which is able to explain a major source of the forecast error variance and which discriminates between successful and unsuccessful acquisitions. Finally, the paper analyzes the motives for forecasting, in particular its role in the pricing of bids and the competition for control.

Mergers, Acquisitions And Business Valuation

Author : Ravindhar Vadapalli
Publisher : Excel Books India
ISBN 13 : 9788174465702
Total Pages : 280 pages
Book Rating : 4.4/5 (657 download)

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Book Synopsis Mergers, Acquisitions And Business Valuation by : Ravindhar Vadapalli

Download or read book Mergers, Acquisitions And Business Valuation written by Ravindhar Vadapalli and published by Excel Books India. This book was released on 2007-11 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt: Mergers, Acquisitions and Business Valuation is a practical guide to the methods of Business Valuation covering quoted and unquoted companies. This book will be invaluable to anyone engaged in a practical or academic investigation of company valuation and Due Diligence Process in Mergers and Acquisitions. This book covers American and Indian Corporate Cases. It is written keeping in view the requirements of MBA students, researchers and academicians as well as practitioners.

International GAAP 2019

Author : Ernst & Young LLP
Publisher : John Wiley & Sons
ISBN 13 : 1119557798
Total Pages : 5328 pages
Book Rating : 4.1/5 (195 download)

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Book Synopsis International GAAP 2019 by : Ernst & Young LLP

Download or read book International GAAP 2019 written by Ernst & Young LLP and published by John Wiley & Sons. This book was released on 2018-12-21 with total page 5328 pages. Available in PDF, EPUB and Kindle. Book excerpt: International GAAP® 2019 is a comprehensive guide to interpreting and implementing International Financial Reporting Standards (IFRS), setting IFRS in a relevant business context and providing insights into how complex practical issues should be resolved in the real world of global financial reporting. This book is an essential tool for anyone applying, auditing, interpreting, regulating, studying or teaching IFRS. Written by EYs financial reporting professionals from around the world, this three-volume guide to reporting under IFRS provides a global perspective on the application of IFRS. Complex technical accounting issues are explained clearly and IFRS is set in a practical context with numerous worked examples and hundreds of illustrations from the published financial reports of major listed companies from around the world. The 2019 edition of International GAAP® has been fully revised and updated in order to: • Continue to investigate the many implementation issues arising as entities adopt IFRS 9 (Financial Instruments) and IFRS 15 (Revenue from Contracts with Customers). • Explore the complex implementation issues arising as entities adopt, in 2019, IFRS 16 (Leases). • Include an updated chapter on the new insurance contracts standard IFRS 17 (Insurance Contracts), which reflects the recent discussions of the IASB’s Transition Resource Group on implementation issues raised, proposed narrow-scope amendments to IFRS 17 intended by the IASB, and also explores other matters arising as users prepare for the adoption of this standard. • Include an amended chapter on the revised Conceptual Framework, which was published in March 2018. The changes to the Conceptual Framework may affect the application of IFRS in situations where no standard applies to a particular transaction or event. • Address amended standards and new interpretations issued since the preparation of the 2018 edition. • Explain the many other initiatives that are currently being discussed by the IASB and by the IFRS Interpretations Committee and the potential consequential changes to accounting requirements. • Provide insight on the many issues relating to the practical application of IFRS, based on the extensive experience of the book’s authors in dealing with current issues.

Prospective Financial Information

Author : AICPA
Publisher : John Wiley & Sons
ISBN 13 : 194354686X
Total Pages : 256 pages
Book Rating : 4.9/5 (435 download)

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Book Synopsis Prospective Financial Information by : AICPA

Download or read book Prospective Financial Information written by AICPA and published by John Wiley & Sons. This book was released on 2017-06-12 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: This resource provides interpretive guidance and implementation strategies for all preparation, compilation examination and agreed upon procedures on prospective financial information: Helps with establishing proven best-practices. Provides practical tools and resources to assist with compliance. Exposes potential pitfalls associated with independence and ethics requirements. SSAE No. 18 SSARS No. 23 Preparation and compilation engagements now fall under the SSARSs The attestation engagements require an assertion from the responsible party