Posted in Finance, Accounting and Economics Terms, Total Reads: 375
It refers to a corporation’s prediction of its near future profit or loss. This prediction is done by financial experts and analysts. It is important for firms to meet these predictions. Generally the firms give guidance of company’s earnings per share prospects for upcoming quarters to direct the management of what is achievable.
Guidance is actually an expected result issue from company to market watchers and importantly shareholders so as to give a vision of company’s prospects. Along with earnings per share, it includes revenue estimates and capital expenditure estimates.
Guidance report impacts the stock rating and also influences the investor’s decision to hold, sell or buy the stock.
Guidance are also called earnings guidance and they help the company to put forth its stakeholders any good news or bad news so that its stock prices are not much affected with tremendous fluctuations when the earnings or actual financials are announced.