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| Author: | Swanson, E. P. Rees, L. Juarez-Valdes, L. F. |
| Title: | The Contribution of Fundamental Analysis after a Currency Devaluation |
| Journal: | Accounting Review
2003 : JUL, VOL. 78:3, p. 875-902 |
| Index terms: | CURRENCY MARKETS DEVALUATION FINANCIAL ANALYSIS FINANCIAL STATEMENTS ECONOMIC SHOCKS |
| Language: | eng |
| Abstract: | For a sample of companies traded on the Mexican Bolsa, fundamental analysis is used to investigate the value of financial statement information to investors after the December 1994 currency devaluation. Associations with contemporary returns show that earnings in the year of the devaluation lose value relevance, but fundamental signals, which incorporate the more detailed accounting information provided in financial statements, retain considerable explanatory power (R2 is 25 percent). After the devaluation, fundamental signals based on changes in selling and administrative expenses and changes in gross margin are significant in several analyses, including predictions of future earnings, analysts' forecast revisions, and analysts' forecast errors. |
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