Australian evidence on analysts' cash flow forecasts: issuance, accuracy and usefulness

Xiaomeng Chen, Meiting Lu*, Yaowen Shan, Yizhou Zhang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

This study examines the factors affecting the issuance, accuracy and usefulness of analysts' cash flow forecasts (CFFs) in Australia. Given the economic importance of the mining industry in Australia, we find that analysts are likely to provide CFFs for mining firms with poor financial health and high default risk. In contrast, analysts' provision of CFFs increases with the degree of financial health for non-mining firms. The determinants of the issuance and accuracy of analysts' CFFs also differ in pre- and post-IFRS adoption periods. Our results add new evidence on the effect of IFRS adoption on analysts' cash flow forecasting behaviours.

Original languageEnglish
Pages (from-to)3-50
Number of pages48
JournalAccounting & Finance
Volume61
Issue number1
Early online date19 Oct 2019
DOIs
Publication statusPublished - Mar 2021

Keywords

  • Accuracy and usefulness
  • Cash flow forecasts
  • Financial analysts

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