Are analysts' earnings forecasts more accurate when accompanied by cash flow forecasts?

• 成果类型: Article; Proceedings Paper
• 署名作者: Call, Andrew C.; Chen, Shuping; Tong, Yen H.
• 署名单位: University of Texas System; University of Texas Austin; University System of Georgia; University of Georgia; Nanyang Technological University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-009-9086-7
• 发表日期: 2009
• 页码: 358-391
• 关键词: security analysts; FUTURE EARNINGS; career concerns; INFORMATION; management; revisions; accruals; recommendations; performance; QUALITY

摘要

We examine whether analysts' earnings forecasts are more accurate when they also issue cash flow forecasts. We find that (i) analysts' earnings forecasts issued together with cash flow forecasts are more accurate than those not accompanied by cash flow forecasts, and (ii) analysts' earnings forecasts reflect a better understanding of the implications of current earnings for future earnings when they are accompanied by cash flow forecasts. These results are consistent with analysts adopting a more structured and disciplined approach to forecasting earnings when they also issue cash flow forecasts. Finally, we find that more accurate cash flow forecasts decrease the likelihood of analysts being fired, suggesting that cash flow forecast accuracy is relevant to analysts' career outcomes.