Statistical analysis of relationships between stock prices and earnings. - Page 49 |
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40
a lm o st a com plete d iv erg en ce in th e f i r s t q u a r te r of 1956
and 1957* Only in th e ca se of In lan d S t e e l Corp. d id th e
p r ic e e a rn in g s r a t i o change r e f l e c t th e e a rn in g s change in
th e f i r s t q u a r te r of 1956, and only in th e case of N a tio n a l
S te e l Corp. and R epublic S te e l Corp. d id th e r e f l e c t i o n
occur in th e f i r s t q u a r te r o f 1957* Thus, f o r th e th re e
p e rio d s of each of th e s i x com panies, th e p r ic e e a rn in g s
r a t i o change f a il e d to r e f l e c t th e e a rn in g s change o f th e
f i r s t q u a r te r a t o t a l of f i f t e e n tim e s, an in c id e n t o f 83
p e r c e n t.
W hile th e r e s u l t s of th e p re v io u s stu d y in d ic a te s
t h a t th e p r ic e e a rn in g s r a t i o change o f th e c u r r e n t
q u a r te r should g e n e r a lly r e f l e c t th e e a rn in g s change of
th e p r io r q u a r te r , f u r t h e r a n a ly s is of T able V II shows
t h a t th e p r ic e e a rn in g s r a t i o change in th e f i r s t q u a r te r
o f 1956 f a i l e d to r e f l e c t th e f o u r th q u a r te r of 1955 e a rn in
g s change in f iv e o f th e s i x com panies, and t h a t th e
p r ic e e a rn in g s r a t i o change in th e f i r s t q u a r te r o f 1957
f a i l e d to r e f l e c t th e f o u r th q u a r te r o f 1956 e a rn in g s
change in fo u r of th e s i x com panies, a t o t a l of n in e tim es
or an in c id e n t of 75 p er c e n t. In th e l i g h t of th e r e s u l t s
o f th e te n -y e a r group a n a ly s is , th e s e f ig u r e s seem abnorm
ally h ig h .
In d eed , th e se f ig u r e s seem to v i t i a t e th e r e s u l t s
of th e te n -y e a r group a n a ly s is u n t i l i t i s c o n sid ered t h a t
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| Title | Statistical analysis of relationships between stock prices and earnings. - Page 49 |
| Repository email | cisadmin@lib.usc.edu |
| Full text | 40 a lm o st a com plete d iv erg en ce in th e f i r s t q u a r te r of 1956 and 1957* Only in th e ca se of In lan d S t e e l Corp. d id th e p r ic e e a rn in g s r a t i o change r e f l e c t th e e a rn in g s change in th e f i r s t q u a r te r of 1956, and only in th e case of N a tio n a l S te e l Corp. and R epublic S te e l Corp. d id th e r e f l e c t i o n occur in th e f i r s t q u a r te r o f 1957* Thus, f o r th e th re e p e rio d s of each of th e s i x com panies, th e p r ic e e a rn in g s r a t i o change f a il e d to r e f l e c t th e e a rn in g s change o f th e f i r s t q u a r te r a t o t a l of f i f t e e n tim e s, an in c id e n t o f 83 p e r c e n t. W hile th e r e s u l t s of th e p re v io u s stu d y in d ic a te s t h a t th e p r ic e e a rn in g s r a t i o change o f th e c u r r e n t q u a r te r should g e n e r a lly r e f l e c t th e e a rn in g s change of th e p r io r q u a r te r , f u r t h e r a n a ly s is of T able V II shows t h a t th e p r ic e e a rn in g s r a t i o change in th e f i r s t q u a r te r o f 1956 f a i l e d to r e f l e c t th e f o u r th q u a r te r of 1955 e a rn in g s change in f iv e o f th e s i x com panies, and t h a t th e p r ic e e a rn in g s r a t i o change in th e f i r s t q u a r te r o f 1957 f a i l e d to r e f l e c t th e f o u r th q u a r te r o f 1956 e a rn in g s change in fo u r of th e s i x com panies, a t o t a l of n in e tim es or an in c id e n t of 75 p er c e n t. In th e l i g h t of th e r e s u l t s o f th e te n -y e a r group a n a ly s is , th e s e f ig u r e s seem abnorm ally h ig h . In d eed , th e se f ig u r e s seem to v i t i a t e th e r e s u l t s of th e te n -y e a r group a n a ly s is u n t i l i t i s c o n sid ered t h a t |
