The Quality Of Analysts Cash Flow Forecasts PDF Download
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| Author | : Dan Givoly |
| Publisher | : |
| Total Pages | : 49 |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
Download The Quality of Analysts' Cash Flow Forecasts Book in PDF, ePub and Kindle
This paper examines properties of analysts' cash flow forecasts and compares these properties with those exhibited by analysts' earnings forecasts. Our results indicate that analysts' cash flow forecasts are of a considerable lower quality than their earnings forecasts. They are less accurate and improve at a slower rate during the forecast period. Further, analysts' cash flow forecasts appear to be, in essence, a naiuml;ve extension of their earnings forecasts and provide no incremental information on expected changes in firms' working capital. Consistent with their low quality and in contrast to their earnings forecasts, analysts' forecasts of cash flows are of limited information content and are only weakly associated with stock price movements. Finally, a measure of expected accruals based on the difference between analysts' earnings and cash flow forecasts has a very low power in detecting earnings management.
| Author | : Jeffrey Coulton |
| Publisher | : |
| Total Pages | : 29 |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Are Analysts' Cash Flow Forecasts Associated with Improved Earnings Quality? Australian Evidence Book in PDF, ePub and Kindle
We investigate the extent to which the provision by sell side analysts of cash flow forecasts incremental to earnings forecasts has an impact on the quality of Australian firms' financial reporting. Using two separate and distinct indicators of earnings quality, we consistently fail to find evidence of any improvement in the quality of financial reporting following analysts' provision of cash flow forecasts. Our results contrast with the argument by Healy and Palepu (2001) that sell side analysts play an important role in monitoring the quality of financial reporting but are consistent with the claim that sell side analysts' cash flow forecasts lack sophistication (Givoly et al. 2009).
| Author | : Lawrence D. Brown |
| Publisher | : |
| Total Pages | : 47 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download To Beat Or Not to Beat? The Importance of Analysts' Cash Flow Forecasts Book in PDF, ePub and Kindle
We investigate the implications of firms' benchmark-beating pattern with respect to analysts' quarterly cash flow forecasts for current capital market valuation and future firm performance. We contend that nonnegative earnings surprises are more likely to be supported by real operating performance and signal higher earnings quality if they are achieved via higher than expected cash flows or lower than expected accruals. We show that firms beating analyst earnings forecasts experience larger positive capital market reactions and larger earnings response coefficients if they beat analyst cash flow forecasts or report lower than expected accruals. We show that superior future firm performance provides an economic justification for the more favorable capital market response obtained by these firms. Our findings suggest that firms' ability to beat analyst cash flow forecasts is informative regarding the quality of earnings surprises.
| Author | : Noor Hashim |
| Publisher | : |
| Total Pages | : 49 |
| Release | : 2016 |
| Genre | : |
| ISBN | : |
Download Do Analysts' Cash Flow Forecasts Improve the Accuracy of Their Target Prices? Book in PDF, ePub and Kindle
Current evidence on the sophistication of analysts' cash flow forecasts is ambiguous. For example, Call et al. (2009) show that issuing cash flow forecasts has important benefits for analysts' earnings forecasts, while Givoly et al. (2009) question the validity of this result, arguing that analysts' cash flow forecasts are simple extrapolations of their earnings forecasts and provide limited incremental information. More recently, Mohanram (2014) and Radhakrishnan and Wu (2014) show that the increasing incidence of cash flow forecasts has helped mitigate accruals mispricing. We contribute to the debate on the usefulness of analysts' cash flow forecasts and their effect on capital market outcomes by examining whether cash flow forecasts have incremental benefits over earnings for analysts' valuation outcomes. We find that analysts who are better at forecasting cash flows are better at forecasting target prices, even after controlling for the quality of their earnings forecasts. Our study provides confirmatory evidence on the sophistication of analysts' cash flow forecasts.
| Author | : Luzi Hail |
| Publisher | : |
| Total Pages | : 26 |
| Release | : 2011 |
| Genre | : |
| ISBN | : |
Download Discussion of Investor Protection and Analysts' Cash Flow Forecasts Around the World Book in PDF, ePub and Kindle
DeFond and Hung (2007) test the conjecture whether financial analysts, due to demand-side pressure, compensate for the limited usefulness of reported earnings by issuing cash flow forecasts. They find that analysts supplement their earnings forecasts more frequently with cash flow forecasts in countries where antidirector rights and legal enforcement quality are poor. In my discussion, I examine their hypothesis development and empirical research design and try to extend their arguments to a time-series setting. As it turns out, the paper's main contention critically hinges on two assumptions: (1) investors' unsatisfied demand for accounting information and (2) their willingness to rely on cash flow forecasts as valuable information signals. The descriptive validity of these assumptions in an international context is a priori not obvious. I then test whether substantial changes in investor protection and/or earnings quality relate to changes in the frequency of cash flow forecasts. My analyses show that analysts' propensity to issue cash flow forecasts increases after the first prosecution under insider trading laws, after non-U.S. firms have cross-listed their shares on a U.S. exchange, or after firms have voluntarily replaced their domestic accounting standards with IFRS or U.S. GAAP. Thus, I conclude that the reasoning behind the levels results does not simply extend to a changes setting.
| Author | : Mark L. DeFond |
| Publisher | : |
| Total Pages | : 38 |
| Release | : 2003 |
| Genre | : |
| ISBN | : |
Download An Empirical Analysis of Analysts' Cash Flow Forecasts Book in PDF, ePub and Kindle
This study investigates the relatively recent and growing trend in analysts making operating cash flow forecasts. We find that cash flow forecasts are made for companies with accounting, operating and financing characteristics that are likely to make cash flows more helpful in interpreting earnings and assessing firm viability. Specifically, consistent with our expectations, we find that cash flow forecasts are more likely to be made for firms: (1) in industries with greater accounting choice heterogeneity; (2) with forecasted earnings losses;(3) with shorter operating cycles; (4) with greater capital intensity; and (5) with higher leverage. These findings suggest that market participants demand cash flow forecasts when cash flows are relatively more useful in assessing firm value. Supporting this explanation, we also find that analysts make cash flow forecasts when current cash flows have greater ability, and earnings have less ability, to predict future cash flows; when annual earnings have a lower association with stock returns; and when cash flow forecast errors are associated with stock returns around the earnings announcement date, but earnings forecast errors are not.
| Author | : Sung Hwan Jung |
| Publisher | : |
| Total Pages | : 48 |
| Release | : 2015 |
| Genre | : |
| ISBN | : |
Download Are Analysts' Cash Flow Forecasts Useful? Book in PDF, ePub and Kindle
This study provides evidence that the cost of equity capital decreases with the number of analysts who issue both cash flow and earnings forecasts (cash analysts). The evidence also shows that cash analysts reduce information asymmetry and predict long-term earnings more accurately than analysts who issue only earnings forecasts. Taken together, these findings suggest that cash analysts provide market participants with high-quality information and, as a result, firms benefit from cash analyst coverage in the form of a reduced cost of equity capital.
| Author | : Timothy Jury |
| Publisher | : John Wiley & Sons |
| Total Pages | : 341 |
| Release | : 2012-05-03 |
| Genre | : Business & Economics |
| ISBN | : 1119968747 |
Download Cash Flow Analysis and Forecasting Book in PDF, ePub and Kindle
This book is the definitive guide to cash flow statement analysis and forecasting. It takes the reader from an introduction about how cash flows move within a business, through to a detailed review of the contents of a cash flow statement. This is followed by detailed guidance on how to restate cash flows into a template format. The book shows how to use the template to analyse the data from start up, growth, mature and declining companies, and those using US GAAP and IAS reporting. The book includes real world examples from such companies as Black and Decker (US), Fiat (Italy) and Tesco (UK). A section on cash flow forecasting includes full coverage of spreadsheet risk and good practice. Complete with chapters of particular interest to those involved in credit markets as lenders or counter-parties, those running businesses and those in equity investing, this book is the definitive guide to understanding and interpreting cash flow data.
| Author | : Andrew Fight |
| Publisher | : Elsevier |
| Total Pages | : 263 |
| Release | : 2005-10-12 |
| Genre | : Business & Economics |
| ISBN | : 0080492533 |
Download Cash Flow Forecasting Book in PDF, ePub and Kindle
Budgets are like road maps -- they provide a direction for a corporates financial management. Balance sheets and statements of revenues also provide insights into how well a company is following that direction. But cash flow and cash flow forecasts are what guide the day-to-day itinerary for an organization. Budgets and cash flow are dynamic -- adjustments and changes can and should occur. If you understand what you are looking at, you can use cash flow to create better budgets and thus more accurate cash flow forecasting. Cash Flow Forecasting outlines the techniques required to undertake a detailed analysis of the cash flow dynamics of the business from both a historical and forward looking perspective. Cash Flow Forecasting explains how to: * Determine appropriate cash flow figures from pro forma financial statements * Interpret detailed cash flow forecasts and understand the difference between profit and cash flow * Conserve or generate cash in the short term * Evaluate different methods of project evaluation * Recognize the limitations of accounting information in valuing companies *Inspired by basic entry level training courses that have been developed by major international banks worldwide * Will enable students and those already in the finance profession to gain an understanding of the basic information and principles of cash flow forecasting * Includes questions with answers, study topics, practical "real world" examples and extensive bibliography
| Author | : Tanja Klettke |
| Publisher | : Springer Science & Business |
| Total Pages | : 120 |
| Release | : 2014-04-28 |
| Genre | : Business & Economics |
| ISBN | : 3658056347 |
Download New Determinants of Analysts’ Earnings Forecast Accuracy Book in PDF, ePub and Kindle
Financial analysts provide information in their research reports and thereby help forming expectations of a firm’s future business performance. Thus, it is essential to recognize analysts who provide the most precise forecasts and the accounting literature identifies characteristics that help finding the most accurate analysts. Tanja Klettke detects new relationships and identifies two new determinants of earnings forecast accuracy. These new determinants are an analyst’s “general forecast effort” and the “number of supplementary forecasts”. Within two comprehensive empirical investigations she proves these measures’ power to explain accuracy differences. Tanja Klettke’s research helps investors and researchers to identify more accurate earnings forecasts.
