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Macroeconomic variables and corporate performance

Oxelheim, Lars LU (2003) In Financial Analysts Journal 59(4). p.36-50
Abstract
Increased economic and financial integration and substantial macroeconomic fluctuations require that corporate managers and investment analysts pay more attention than in the past to the link between the "noise" that these fluctuations represent and the company's performance-past and future. For many reasons, company managers must weed out the effects of the noise to obtain a clear picture of the company's intrinsic competitiveness and long-term sustainable profits. The question is: To what extent can outside shareholders and investment analysts adopt this approach to corporate performance? Current reporting practice does not provide these outsiders with an adequate idea of the character and magnitude of the impact of macroeconomic... (More)
Increased economic and financial integration and substantial macroeconomic fluctuations require that corporate managers and investment analysts pay more attention than in the past to the link between the "noise" that these fluctuations represent and the company's performance-past and future. For many reasons, company managers must weed out the effects of the noise to obtain a clear picture of the company's intrinsic competitiveness and long-term sustainable profits. The question is: To what extent can outside shareholders and investment analysts adopt this approach to corporate performance? Current reporting practice does not provide these outsiders with an adequate idea of the character and magnitude of the impact of macroeconomic variables on the company. The recommendations of International Accounting Standard 1, Presentation of Financial Statements (as revised in 1997), however, offer an improvement in this important area. This article presents four levels of implementation of IAS 1 and what these levels mean in terms of relevant information transmitted to outsiders. Illustrations are provided of current practices in two global industries and of a release that would meet the informational demands of shareholders and analysts. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
financial statement analysis : accounting and financial reporting, equity investments : fundamental analysis and valuation models, and proposals, issues, financial statement analysis : financial accounting standards
in
Financial Analysts Journal
volume
59
issue
4
pages
36 - 50
publisher
CFA Institute (Chartered Financial Analysts Institute)
external identifiers
  • wos:000184704300005
  • scopus:20444447396
ISSN
0015-198X
DOI
10.2469/faj.v59.n4.2544
language
English
LU publication?
yes
id
a655e156-fb9e-484b-9288-1219a691e2cb (old id 900048)
date added to LUP
2008-01-15 10:14:49
date last changed
2018-01-07 09:30:52
@article{a655e156-fb9e-484b-9288-1219a691e2cb,
  abstract     = {Increased economic and financial integration and substantial macroeconomic fluctuations require that corporate managers and investment analysts pay more attention than in the past to the link between the "noise" that these fluctuations represent and the company's performance-past and future. For many reasons, company managers must weed out the effects of the noise to obtain a clear picture of the company's intrinsic competitiveness and long-term sustainable profits. The question is: To what extent can outside shareholders and investment analysts adopt this approach to corporate performance? Current reporting practice does not provide these outsiders with an adequate idea of the character and magnitude of the impact of macroeconomic variables on the company. The recommendations of International Accounting Standard 1, Presentation of Financial Statements (as revised in 1997), however, offer an improvement in this important area. This article presents four levels of implementation of IAS 1 and what these levels mean in terms of relevant information transmitted to outsiders. Illustrations are provided of current practices in two global industries and of a release that would meet the informational demands of shareholders and analysts.},
  author       = {Oxelheim, Lars},
  issn         = {0015-198X},
  keyword      = {financial statement analysis : accounting and financial reporting,equity investments : fundamental analysis and valuation models,and proposals,issues,financial statement analysis : financial accounting standards},
  language     = {eng},
  number       = {4},
  pages        = {36--50},
  publisher    = {CFA Institute (Chartered Financial Analysts Institute)},
  series       = {Financial Analysts Journal},
  title        = {Macroeconomic variables and corporate performance},
  url          = {http://dx.doi.org/10.2469/faj.v59.n4.2544},
  volume       = {59},
  year         = {2003},
}