Header menu link for other important links
X
The joint information role of analysts’ cash flow and earnings forecasts
S. Dhole, F.A. Gul, S. Mishra,
Published in Blackwell Publishing
2021
Volume: 61
   
Issue: 1
Pages: 499 - 541
Abstract
We study whether the relative magnitudes of analysts’ cash flow and earnings forecasts convey information about the persistence and value relevance of reported earnings. We find that reported earnings are likely to be more (less) persistent and value relevant when analysts forecast relatively moderate (extreme) levels of operating cash flows, relative to earnings. We also find that the market’s response to a given earnings surprise is the strongest for moderate levels of cash flow forecasts relative to earnings. The joint information role of analysts’ cash flow and earnings forecasts persists even after controlling for the absolute accruals in the model. © 2019 Accounting and Finance Association of Australia and New Zealand
About the journal
JournalAccounting and Finance
PublisherBlackwell Publishing
ISSN08105391