Financial Statement Benchmarking
Peer benchmarking is widely used in practice and research and is central to financial statement analysis. Tasks such as forecasting earnings, performance evaluation, and firm valuation all rely on benchmarking. Yet, finding suitable benchmark peers from a financial standpoint is not trivial. Addressing this issue, we have developed a pairwise financial statement benchmarking (FSB) measure that captures the degree of overlap in the financial statement line items reported by two public firms. A higher FSB score indicates a better benchmarking fit between the pairs. We have validated this measure using actual peer choices by financial analysts and corporate boards when performing their firm performance and compensation benchmarking, respectively. For each firm, we also average FSB scores across all industry peers to create a firm-level measure, capturing the general benchmarkability of the firm, FSB-Firm. We share SAS code to generate the measure and data that includes the two measures in the links below:
If you decide to use the data, please consider citing the following paper:
Hoitash, R., U. Hoitash, A. Kurt, and R. Verdi. 2022. A Measure of Financial Statement Benchmarking. The Accounting Review, Forthcoming.
Download Firm Benchmarking Data and Code
Rani Hoitash
Rani Hoitash, Ph.D., CISA
John E. Rhodes Professor of Accounting
Bentley University
SSRN research papers, Google Scholar page
Email: rhoitash@bentley.edu
Udi Hoitash
Udi Hoitash, Ph.D.
Lilian L. and Harry A. Cowan Research Professor
Northeastern University
Faculty profile page, SSRN research papers, Google Scholar page
Ahmet Kurt
Ahmet Kurt, Ph.D.
Assistant Professor of Accounting,
Bentley University
SSRN research papers, Google Scholar page
Email:akurt@bentley.edu
Rodrigo Verdi
Rodrigo Verdi, Ph.D.,
Nanyang Technological University Professor of Accounting
Massachusetts Institute of Technology
SSRN research papers, Google Scholar page
Email: rverdi@mit.edu