Journal of Business & Economic Policy

ISSN 2375-0766 (Print), 2375-0774 (Online) DOI: 10.30845/jbep

Top vs Bottom Line Information and Portfolio Return Variability: A Case Study of the DJIA Index
Jana Sacks, Ph.D.

This paper examines a set of standard corporate financial reporting numbers, and their growth rates, in particular, influencing stock return variability in a portfolio. I examine the influence of growth in sales versus changes in net earnings. Using stock return data from member companies listed in the DJIA index, I find that growth in sales is likely to have a much larger explanatory power in determining return uncertainty in the DJIA, in comparison to the influence of changes in net profit.

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