The Implications of Using Stock-Split Adjusted I/B/E/S Data in Empirical Research

34 Pages Posted: 17 Apr 2002

See all articles by Jeff L. Payne

Jeff L. Payne

University of Kentucky - Von Allmen School of Accountancy

Wayne B. Thomas

University of Oklahoma

Multiple version iconThere are 2 versions of this paper

Date Written: April 2003

Abstract

The purpose of this study is to highlight issues of interest to researchers employing the I/B/E/S earnings and forecast data. I/B/E/S has traditionally provided per share data on a split-adjusted basis, rounded to the nearest penny. In doing so, per share amounts are comparable over time. However, because not all prior forecasts and earnings per share amounts divide precisely to a penny, adjusting for stock splits and rounding to the nearest penny can cause a loss of information. Researchers are prohibited in many cases from determining the amounts actually reported in prior years, leading to misclassified observations. We obtain actual (unadjusted) earnings and forecast data from I/B/E/S and compare results to those generated using the adjusted I/B/E/S data. We replicate prior studies and find that conclusions are affected when using the actual I/B/E/S data.

Keywords: Analysts' Forecast Errors, Earnings, Earnings Changes, Earnings Announcement Returns, Dispersion, Misclassification

JEL Classification: M41, G29

Suggested Citation

Payne, Jeff L. and Thomas, Wayne B., The Implications of Using Stock-Split Adjusted I/B/E/S Data in Empirical Research (April 2003). Available at SSRN: https://ssrn.com/abstract=307522 or http://dx.doi.org/10.2139/ssrn.307522

Jeff L. Payne

University of Kentucky - Von Allmen School of Accountancy ( email )

Lexington, KY 40506
United States

Wayne B. Thomas (Contact Author)

University of Oklahoma ( email )

Michael F. Price College of Business,
307 W Brooks, Rm 212B
Norman, OK 73019
United States
405-325-5789 (Phone)
405-325-7348 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
912
Abstract Views
4,263
Rank
47,766
PlumX Metrics