Power Transformations in Time-Series Models of Quarterly Earnings per Share.

W. S. Hopwood; J. C. Mckeown; P. Newbold

doi:10.2308/tar-4481803

Power Transformations in Time-Series Models of Quarterly Earnings per Share.

W. S. Hopwood¹; J. C. Mckeown²; P. Newbold³

¹ Associate Professor of Accountancy, University of Illinois at Urbana-Champaign. 1 · ² Professor of Accountancy, University of Illinois at Urbana-Champaign. 2 · ³ Professor of Economics, University of Illinois at Urbana-Champaign. 3

The Accounting Review 1981

Abstract ABSTRACT: For many quarterly time series of corporate earnings per share, the data indicate the desirability of incorporating a power transformation into the time series model. Our empirical results suggest that, for such series, this will generally lead to forecasts of improved quality. The resulting forecasts compare more favorably with those of financial analysts than do forecasts derived from models without the transformation parameter.

DOI: 10.2308/tar-4481803
Volume: 56 (4)
Pages: 927-933
Language: en
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