14-Week quarters

Rick Johnston; Andrew J. Leone; Sundaresh Ramnath; Ya wen Yang

doi:10.1016/j.jacceco.2011.06.003

14-Week quarters

Rick Johnston, Andrew J. Leone^*, Sundaresh Ramnath, Ya wen Yang

^*Corresponding author for this work

Accounting Information and Management

Research output: Contribution to journal › Article › peer-review

5 Scopus citations

Abstract

Many firms define their fiscal quarters as 13-week periods so that each fiscal year contains 52 weeks, which leaves out one or two day(s) a year. To compensate, one extra week is added every fifth or sixth year and, consequently, one quarter therein comprises 14 weeks. We find evidence of predictable forecast errors and stock returns in 14-week quarters, suggesting that analysts and investors do not, on average, adjust their expectations for the extra week. The ease with which 14-week quarters can be predicted, and expectations adjusted, suggests a surprising lack of effort on the part of analysts and investors.

Original language	English (US)
Pages (from-to)	271-289
Number of pages	19
Journal	Journal of Accounting and Economics
Volume	53
Issue number	1-2
DOIs	https://doi.org/10.1016/j.jacceco.2011.06.003
State	Published - Feb 1 2012

Keywords

Analysts
Fiscal year
Market efficiency

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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abstract = "Many firms define their fiscal quarters as 13-week periods so that each fiscal year contains 52 weeks, which leaves out one or two day(s) a year. To compensate, one extra week is added every fifth or sixth year and, consequently, one quarter therein comprises 14 weeks. We find evidence of predictable forecast errors and stock returns in 14-week quarters, suggesting that analysts and investors do not, on average, adjust their expectations for the extra week. The ease with which 14-week quarters can be predicted, and expectations adjusted, suggests a surprising lack of effort on the part of analysts and investors.",

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T1 - 14-Week quarters

AU - Johnston, Rick

AU - Leone, Andrew J.

AU - Ramnath, Sundaresh

AU - Yang, Ya wen

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N2 - Many firms define their fiscal quarters as 13-week periods so that each fiscal year contains 52 weeks, which leaves out one or two day(s) a year. To compensate, one extra week is added every fifth or sixth year and, consequently, one quarter therein comprises 14 weeks. We find evidence of predictable forecast errors and stock returns in 14-week quarters, suggesting that analysts and investors do not, on average, adjust their expectations for the extra week. The ease with which 14-week quarters can be predicted, and expectations adjusted, suggests a surprising lack of effort on the part of analysts and investors.

AB - Many firms define their fiscal quarters as 13-week periods so that each fiscal year contains 52 weeks, which leaves out one or two day(s) a year. To compensate, one extra week is added every fifth or sixth year and, consequently, one quarter therein comprises 14 weeks. We find evidence of predictable forecast errors and stock returns in 14-week quarters, suggesting that analysts and investors do not, on average, adjust their expectations for the extra week. The ease with which 14-week quarters can be predicted, and expectations adjusted, suggests a surprising lack of effort on the part of analysts and investors.

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KW - Fiscal year

KW - Market efficiency

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