Corporate Sales, Predisclosure Information and Return Variability

George W. Blazenko

Journal of Business Finance & Accounting, 1997, vol. 24, issue 6, 833-850

Abstract: This paper investigates the determinants of return variability between accounting report and non‐report periods. A model of information dissemination in financial markets is developed which shows that if corporate sales activity is a source of predisclosure information, the ratio of return variability between accounting report and non‐report periods decreases in contribution margin per dollar sales. Greater contribution margin increases that portion of cash flow variability which is predictable by investors' observation of sales activity and, therefore, contribution margin indexes the informativeness of sales‐related predisclosure information. Greater informativeness increases return variability in the predisclosure period relative to the accounting report period. Supporting evidence for this prediction is presented.

Date: 1997
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/1468-5957.00136

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:24:y:1997:i:6:p:833-850

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0306-686X

Access Statistics for this article

Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker

More articles in Journal of Business Finance & Accounting from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().