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., Hoitash, U., Kurt, A.C., and Verdi, R.S., 2023. A measure of financial statement benchmarking. The Accounting Review, 98(6), pp.253-281. 


Download Firm Benchmarking Data and Code

Rani Hoitash

Rani Hoitash, Ph.D., CISA

John E. Rhodes Professor of Accounting

Bentley University

 Faculty profile page

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

Email:u.hoitash@northeastern.edu

Ahmet Kurt

Ahmet Kurt, Ph.D.

Assistant Professor of Accounting,

Bentley University

 Faculty profile page

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

Faculty profile page

SSRN research papers,  Google Scholar page

Email: rverdi@mit.edu