|
Do Analysts Who Issue Cash Flow Forecasts Predict More Accurate Earnings?
Jinhan Pae, Queen's University
Shiheng Wang, Queen's University
Choong - Yuel Yoo, Queen's University
ABSTRACT. This paper examines the impact of issuing cash flow forecasts on analysts’ earnings forecasting performance. We find that analysts who issue cash flow forecasts (“cash flow forecast issuers”) experience an improvement in their earnings forecast accuracy relative to those who do not (“non-issuers”); however, there is no significant cross-sectional difference in the level of earnings forecast accuracy between cash flow forecast issuers and non-issuers. We also find that the benefits of issuing cash flow forecasts are more pronounced when analysts start or cease to issue cash flow forecasts. We conclude that issuing cash flow forecasts improves analysts’ earnings forecast accuracy, but the benefits of issuing cash flow forecasts are limited in the sense that cash flow forecast issuers do not predict more accurate earnings than non-issuers after controlling for other analyst and forecast characteristics.
Full-Text is no longer available online. Please contact the author(s) for more information about this manuscript.
Back to Session Listing
|