Burger chain Shake Shack announced third-quarter 2015 earnings of $6.2 million, on revenues that were over 67
Question:
Burger chain Shake Shack announced third-quarter 2015 earnings of $6.2 million, on revenues that were over 67 percent higher than those of the same period in the prior year. Earnings per share ($0.12) beat the consensus analyst forecast of $0.07. In reaction to the news, Shake Shack’s stock price rose over 4 percent, according to a CNBC report (11/5/15).
REQUIRED:
a. What is a consensus forecast?
b. Why are companies concerned about meeting or beating the consensus forecast?
c. What strategies can companies use to help meet or beat the forecasts, and why might those who analyze financial statements be concerned?
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Step by Step Answer:
a A consensus earnings forecast is the most common or average earnings forecast by Wall Street analy...View the full answer
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