The Impact of Split Adjusting and Rounding on Analysts' Forecast Error Calculations

By William R. Baber, Sok-Hyon Kang. 2002

111 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/4c870dbba66850df43b8e2bb793959e808f67397

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Citations in the corpus

Earnings Management? Erroneous Inferences Based on Earnings Frequency Distributions (2009, unknown): “1 See, for example, Baber and Kang [1999], Beatty, Ke, and Petroni, [1999], Beaver, McNichols, and Nelson [2007], Burgstahler and Dichev [1997], Brown and Caylor [2004], Collins, Pincus, and Xie [1999], Degeorge, Patel, and Zeckhauser [1999], Easton [1999], Gunny, Jacob, and Jorgensen [2007], Hollan”
Beating Earnings Benchmarks and the Cost of Debt (2008, methodology): “Inferences are the same using the adjusted or unadjusted I/B/E/S file following Baber and Kang (2002) and Payne and Thomas (2003).”
The Implications of Using Stock-Split Adjusted I/B/E/S Data in Empirical Research (2003, methodology): “Baber and Kang (2002) point out that split adjusting a d rounding analyst forecast data can result in “contaminated” observations (i.e., observations reported as having had zero forecast error but actually had nonzero forecast error).”
The Walk-down to Beatable Analyst Forecasts: The Role of Equity Issuance and Insider Trading Incentives* (2004, unknown): “Finally, Baber and Kang (2002) report that forecast errors collected by data providers such as I/B/E/S are rounded to the nearest cent after making retroactive”
Trading incentives to meet the analyst forecast (2006, methodology): “We use the unadjusted I/ B/E/S forecasts to avoid losing the precision in the decimal places of the forecasts due to the I/B/E/S adjustments of prior forecasts for subsequent stock splits (Baber & Kang, 2002; Payne & Thomas, 2003).”
The Impact of the Sec's Regulation of Non-Gaap Disclosures (2008, unknown): “15 We use the unadjusted I\B\E\S data because Baber and Kang (2002) and Payne and Thomas (2003) report the splitadjusted I/B/E/S Summary History data introduces error into earnings forecast error and beating/meeting forecast classifications.”
Identifying Expectation Errors in Value/Glamour Strategies: A Fundamental Analysis Approach (2012, unknown): “stock splits (Baber and Kang, 2002; Payne and Thomas, 2003).”
Equity Incentives and Earnings Management (2005, unknown): “12 Baber and Kang (2002) find that analysts’ forecast data in I/B/E/S or First Call are subject to split adjustment bias; because these databases adjust stock splits retrospectively and split-adjusted data are rounded to the nearest cent, the probability of zero or one cent forecast errors might be…”
Making Sense of Cents: An Examination of Firms That Marginally Miss or Beat Analyst Forecasts (2009, background): “9 This is consistent with Baber and Kang (2002) who study the impact of split adjusting and rounding on analysts’ forecast error calculations and find that firms that meet earnings forecasts (using unadjusted I/B/E/S data) have significantly negative 3 day abnormal returns.”