1. What does standardised unexpected earnings imply ?
2. Higher sue or lower sue which is better ?
3. i can understand that low std dev would give better forecast but what abt the numerator ? If it is has a higher magnitude what happens ? ( reported earnings – mean forecasted earnings is huge )
what should we understand from this ?
“Unexpected earnings” is the term used in accounting to address the difference between a company’s actual earnings for a period and the earnings they were expected to generate.
One of the most common methods to determine unexpected earnings is a mathematical formula known as “standardized unexpected earnings” or SUE.
SUE= (EPSQ1-Forecasted EPS for the same Q1)/S.D.