Synapse
⌘+K
Synapse
PulseExploreClubsResearchersJournals
Instagram
HomeClubsExplore
March 18, 2026The Accounting Review

Further Observations on Reported Earnings and Stock Prices.

View Full Paper
Ask AI
Bookmark
Share

Authors

JOJohn L. O'DonnellMichigan State University

Discussion

Loading...

Member takes

Implication

Analysis shows the impact of earnings reporting on stock prices in electric utility firms, suggesting investment implications.

Key Points

  • The research aims to examine the relationship between reported earnings and stock prices in electric utility companies during 1949-1961.
  • Analyzed earnings reporting practices of 25 electric utility firms from 1949 to 1961.
  • Identified two main approaches: flow-through procedure and normalized earnings.
  • Assessed the impact of depreciation methods on tax reporting.
  • Eighteen firms normalized reported earnings while seven used the flow-through method.
  • Flow-through firms reported higher income due to lower tax provisions.
  • Fixed charge coverage ratio emerged as a critical factor influencing bond ratings and stock prices.

Cite This Study

John L. O'Donnell (1968) studied this question.

synapsesocial.com/papers/69ba42fb4e9516ffd37a3bbfhttps://doi.org/10.2308/tar-4496393
View Full Paper
Ask AI
Bookmark
Share

Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1RELATIONSHIPS BETWEEN REPORTED EARNINGS AND STOCK PRICES IN THE ELECTRIC UTILITY INDUSTRY.1965
  2. 2Normalization Versus Flow Through for Utility Companies Using Liberalized Tax Depreciation.1974
  3. 3Regulation, Implied Revenue Requirements, and Methods of Depreciation.1974
  4. 4Accelerated Depreciation and Rate Regulation.1969
  5. 5Interperiod Tax Allocation and -Depreciation Methods: Some Empirical Results.1973