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A recent paper by Simi Kedia, of Rutgers, and Thomas Philippon, of N.Y.U., for instance, looked at all the companies known to have been managing earnings between 1997 and 2000.
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Accounting Red Flags 02.27.02 Five warning signs that a company is spending more time managing earnings than managing their business.
With most stocks priced for perfection, corporate leaders have been managing earnings to maintain Wall Street confidence.
Stock-owning directors are more likely to oppose management's attempts to manage earnings when transparency increases.
For non-stock owning directors, however, increasing transparency does not affect the likelihood that directors oppose management's attempts to manage earnings.
"We don't manage earnings, we manage businesses," Mr. Welch responded, calling those who say otherwise "brain-dead idiots".
Big companies tend to manage earnings expectations by regularly briefing Wall Street analysts.
They also managed earnings to appeal to Wall Street's short-term orientation.
"Andersen auditors would never, under any circumstances, tolerate an arrangement intended to manage earnings," he said.
"They can manage earnings in ways that other companies envy," Mr. Ghriskey of Dreyfus said.
Some of our classiest companies today manage earnings.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com