earticle

영어

This paper empirically examines information contents of sales by introducing a new portfolio approach. The research design of prior studies which test incremental information contents of sales over accounting earnings is considered to be unreasonable. Since investors are expected to use earnings, first of all, in their investment decision making, the information contents of sales should be tested under relationship with accounting earnings. The portfolio approach used in this paper is devised to test information contents of sales secondary to earnings information by dividing sample into 6 groups. The sample consists of 1,183 listed firms over the period of 1990 to 1992. Regression analyses are conducted to test information contents of sales. Dependent variable is standardized cumulative abnormal returns over the test window of day -1 to 0. Independent variables are unexpected earnings and group variable which is measured by allocating score to 6 groups to it`s order. The order of 6 groups is designed to reflect information contents of sales under relationship with accounting earnings. This independent variable is different from unexpected sales which prior researches used in testing the information content of sales separated from earnings. The results show that unexpected sales is insignificant but group variable used in this paper is significant at 1%~10%(modelⅢ) as expected. This implies that investors are using sales as secondary information to accounting earnings in their investment decision making. This results will be useful for investment decision making in stock market, and can be a benchmark for further studies.