Journal of Business & Economic Policy

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

Abstract
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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