Do analysts’ cash flow forecasts improve firm value?open access
- Authors
- Oh, Hyun Min; Park, Sam Bock; Kim, Jong Hyun
- Issue Date
- Dec-2020
- Publisher
- MDPI AG
- Keywords
- Analysts’ cash flow forecasts; Analysts’ earnings forecasts; Firm value
- Citation
- International Journal of Financial Studies, v.8, no.4, pp.1 - 24
- Indexed
- SCOPUS
- Journal Title
- International Journal of Financial Studies
- Volume
- 8
- Number
- 4
- Start Page
- 1
- End Page
- 24
- URI
- https://scholarworks.bwise.kr/erica/handle/2021.sw.erica/1779
- DOI
- 10.3390/ijfs8040060
- ISSN
- 2227-7072
- Abstract
- We examine whether analysts’ cash flow forecasts improve firm value. First, we analyze whether the joint issuance of financial analysts’ earnings and cash flow forecasts improve firm value. Second, we analyze whether the quality of analysts’ cash flow forecasts improve firm value. The empirical results of our study are as follows. First, the joint issuance of analysts’ earnings and cash flow forecasts has a significantly positive effect on firm value; providing cash flow forecasts reduces information asymmetry and increases earnings quality, thereby increasing corporate value. Second, the quality of analysts’ cash flow forecasts has a significantly positive effect on firm value; the more accurate cash flow forecasts are, the higher firm value is. Our study provides empirical evidence for that the conclusion that cash flow forecasting information produced by financial analysts provides useful information for capital market participants in economic decision making. © 2020 by the authors. Licensee MDPI, Basel, Switzerland.
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