分析师为什么选择性的发布现金流预测?——基于信息需求理论的实证研究

分析师在对公司发布盈余预测的同时,还对一些公司发布了现金流预测。分析师为什么仅针对某些公司发布现金流预测?其动因何在?本文基于信息需求理论对上述问题进行了研究,研究发现,分析师针对现金流信息需求高的公司发布现金流预测的可能性更大。进一步发现,分析师更可能对非国有控股的公司发布现金流预测。本文首次基于我国独特的制度背景,研究分析师选择性发布现金流预测的动因问题。本文的结论有助于加深对分析师行为的理解,并对投资者决策具有一定的参考价值。     

The joint information role of analysts’ cash flow and earnings forecasts

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.     

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

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.     

Private Control Benefits and Earnings Management: Evidence from Insider Controlled Firms

We examine earnings management practices of insider controlled firms across 22 countries to shed light on the link between consumption of private benefits and earnings management. Insider controlled firms are associated with more earnings management than noninsider controlled firms in weak investor protection countries. Consistent with the private benefits motive, insider controlled firms with greater divergence between cash‐flow rights and control rights are associated with more earnings management in these countries. Growth opportunities attenuate the association between insider control and earnings management even in weak investor protection countries. We also find some weak evidence that insider controlled firms are associated with less earnings management in strong investor protection countries. Overall, our results highlight a strong link between private benefits consumption and earnings management.     

Do Analysts Disclose Cash Flow Forecasts with Earnings Estimates when Earnings Quality is Low?

Cash flows are incrementally useful to earnings in security valuation mainly when earnings quality is low. This suggests that when earnings quality decreases, analysts will be more likely to supplement their earnings forecasts with cash flow estimates. Contrary to this prediction, we find that analysts do not disclose cash flow forecasts when the quality of earnings is low. This is because cash flow forecast accuracy depends on the accuracy of the accrual estimates and the precision of accrual forecasts decreases for firms with low quality earnings. Consequently, as earnings quality decreases, cash flow forecasts become increasingly inaccurate compared to earnings estimates. Cash flow estimates that lack reliability are not useful to investors and, consequently, unlikely to be reported by analysts. This result provides an explanation for why analysts are less likely to report cash flow estimates when earnings quality is low.     

Regulation FD and analysts’ vs. investors’ weightings of the cash components of earnings

This paper investigates whether investors’ bias in processing the information contained in the cash components of annual earnings has been reduced, and whether the difference in bias between financial analysts and investors has decreased subsequent to Regulation Fair Disclosure (hereafter, Reg FD). We compare analysts’ and investors’ weightings of the three cash flow components of earnings, defined by Dechow, Richardson, and Sloan (2008), from 1985 to 2008, using historical weightings as benchmarks. Our results show that, in the post Reg FD period, the magnitude of investors’ (analysts’) mis-weightings has decreased (increased), and the differences between analysts’ and investors’ mis-weightings have become smaller. Overall, these results suggest that financial analysts’ information advantages over investors declined after Reg FD took effect, and that investors consequently are less biased in assessing the persistence of the cash flow components of earnings following the implementation of Reg FD.     

Is knowledge powerful? Evidence from financial education and earnings quality

Previous studies emphasize the importance of investor legal protection on financial reporting quality. We argue that investors’ awareness of their legal rights and understanding of the financial products play complementary roles. Financially well-educated investors are more likely to be able to understand investment-related information and less likely to be tricked, hence can pressure managers to eschew misappropriate behavior. This paper explores the role of investor financial education as a corporate governance mechanism in the context of earnings quality. Using data from 43 countries during the sample period of 1994–2012, we find that earnings quality is higher in countries with better financial education after controlling for various institutional environments. Interestingly, the positive effect of financial education on earnings quality exists only in countries with stronger investor legal protection, indicating a complementary role of financial education. Our study provides evidence on the role of financial education in investor protection.     

To beat or not to beat? The importance of analysts’ cash flow forecasts

We investigate the implications of firms’ benchmark-beating patterns with respect to analysts’ quarterly cash flow forecasts for firms’ current capital market valuation and their future performance. We hypothesize that nonnegative earnings surprises are more likely to be supported by real operating performance and signal higher earnings quality if they are achieved via higher than expected cash flows or lower than expected accruals. We show that firms beating analyst earnings forecasts have larger positive capital market reactions and larger earnings response coefficients if they beat analyst cash flow forecasts or report lower than expected accruals. We also demonstrate that these firms’ superior future performance may provide an economic justification for their more favorable market response. Our findings suggest that firms’ ability to beat analyst cash flow forecasts is informative regarding the quality of their earnings surprises.     

Are analysts' cash flow forecasts useful?

This study provides evidence that the cost of equity capital decreases with the number of analysts who issue both cash flow and earnings forecasts (cash analysts). The evidence also shows that cash analysts reduce information asymmetry and predict long‐term earnings more accurately than analysts who issue only earnings forecasts. Taken together, these findings suggest that cash analysts provide market participants with high‐quality information and, as a result, firms benefit from cash analyst coverage in the form of a reduced cost of equity capital.