The Cost Stickiness Phenomenon : Causes, Characteristics, and Implications for Fundamental Analysis and Financial Analysts’ Forecasts

by Daniel Baumgarten

Understanding cost behavior is a fundamental element of cost accounting and the management of a firm. Deviating from the traditional assumption of symmetric cost behavior, numerous recent research studies show that costs are sticky, that is, they decrease less when sales fall than they increase when sales rise. Daniel Baumgarten comprehensively analyzes the cost stickiness phenomenon by discussing its development and all relevant findings presented in the research literature. Furthermore, he provides several suggestions for future research and discusses important implications of cost stickiness for fundamental analysis and analysts’ forecasts by means of two comprehensive empirical analyses

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Year of publication:	2012
Authors:	Baumgarten, Daniel
Publisher:	Wiesbaden : Gabler Verlag
Subject:	Variable Kosten \| Anpassung \| Umsatz \| Rückgang \| Kostenverlauf \| Asymmetrie \| Prognose
Description of contents:	The Cost Stickiness Phenomenon -- Cost Stickiness and the Information Content of the SG&A Ratio -- Cost Stickiness and Analysts' Implied Forecasts -- Concluding Remarks Description [swbplus.bsz-bw.de]

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Extent:	Online-Ressource (XXIV, 105p. 4 illus, digital)
Series:	Quantitatives Controlling SpringerLink / Bücher
Type of publication:	Book / Working Paper
Language:	English
Notes:	Description based upon print version of record Geleitwort; Vorwort; Table of Contents; List of Figures; List of Tables; List of Abbreviations; List of Symbols; 1 Introduction; 2 The Cost Stickiness Phenomenon; 2.1 Evidence on the Stickiness of Costs and its Potential Causes; 2.2 Characteristics of Cost Stickiness; 2.2.1 General Characteristic of Cost Stickiness; 2.2.1.1 Stickiness of Different Cost Components; 2.2.1.2 The Influence of the Magnitude of Changes in Activity; 2.2.1.3 The Time Horizon of Cost Stickiness; 2.2.1.4 Cyclical Characteristics of Cost Stickiness; 2.2.2 Firm-Specific Characteristics of Cost Stickiness 2.2.3 Industry-Specific Characteristics of Cost Stickiness2.2.4 Country-Specific Characteristics of Cost Stickiness; 2.3 Cost Stickiness and Managerial Incentives; 2.4 Criticism of the Cost Stickiness Concept; 2.5 Applications of the Cost Stickiness Concept to Related Financial Research; 3 Cost Stickiness and the Information Content of the SG&A Ratio; 3.1 Introduction; 3.2 The SG&A Ratio in Fundamental Analysis; 3.3 Research Design and Data; 3.3.1 Research Design; 3.3.1.1 Impact on Future Operating Earnings per Share; 3.3.1.2 Impact on Future Sales, Cost of Goods Sold, and SG&A Costs 3.3.1.3 Influence of Potential for Enhancements of Operating Processes3.3.2 Sample Data; 3.3.3 Descriptive Statistics; 3.4 Results; 3.4.1 Impact on Future Operating Earnings per Share; 3.4.2 Impact on Future Sales, Cost of Goods Sold, and SG&A Costs; 3.4.3 Influence of Potential for Enhancements of Operating Processes; 3.5 Differentiation from an Explanation in Terms of Cost Stickiness; 3.6 Sensitivity Analyses; 3.6.1 Changes in the Segmentation of the Sample; 3.6.2 Impact on Earnings per Share; 3.7 Conclusion; 4 Cost Stickiness and Analysts' Implied Cost Forecasts; 4.1 Introduction 4.2 Literature Review and Hypothesis Development4.2.1 Cost Stickiness; 4.2.2 Earnings Forecast Optimism; 4.2.3 Hypotheses Development; 4.3 Research Design and Sample; 4.3.1 Research Design; 4.3.2 Sample and Descriptive Statistics; 4.4 Results; 4.5 Sensitivity Analyses; 4.5.1 More Extensive Data Trimming; 4.5.2 Median Consensus Forecasts; 4.5.3 Problematic Cost Components; 4.5.4 Individual Forecasts; 4.5.5 Industrial Firms; 4.5.6 Clustered Standard Errors or Fama-MacBeth [1973] Regression; 4.5.7 Main Effect of Decrease Dummy; 4.5.8 Experienced Analysts; 4.6 Conclusion; 5 Concluding Remarks References
ISBN:	978-3-8349-4131-2 ; 978-3-8349-4130-5
Other identifiers:	10.1007/978-3-8349-4131-2 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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