Purpose

The purpose of this study is to examine the sophistication (accuracy, bias, informativeness for changes in accruals) and market pricing of analysts’ cash flow forecasts for Eurozone listed firms and the effects of financial distress and auditor quality.

Design/methodology/approach

Accuracy/bias is investigated using analysts’ cash flow forecast errors. The naïve extrapolation model is used to examine the forecasts’ informativeness for working capital changes. A total return model is used to examine value-relevance. This study controls for the forecast horizon, using the Altman z-score and a BigN/industry specialization auditor indicator to proxy for distress and auditor quality, respectively.

Findings

Analysts efficiently adjust earnings forecasts for depreciation during cash flow forecast formation but fail to efficiently incorporate working capital changes. Findings indicate cash flow forecasts’ accuracy improves for distressed firms and firms of high auditor quality, attributed to analyst conservatism and accounting choices and more accurate earnings forecasts, respectively. Cash flow forecasts’ value-relevance increases for distressed firms, particularly those of high auditor quality and timely forecasts.

Originality/value

To the best of the authors’ knowledge, this study is the first to examine analysts’ cash flow forecasts taking into consideration financial distress and auditor quality, controlling for the analyst forecast horizon.

中文翻译：

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分析师的现金流预测信息量、财务困境和审计师质量

目的

本研究的目的是检查分析师对欧元区上市公司现金流量预测的复杂性（准确性、偏差、应计变化的信息量）和市场定价，以及财务困境和审计师质量的影响。

设计/方法/方法

使用分析师的现金流预测误差来调查准确性/偏差。朴素外推模型用于检查预测对营运资金变化的信息量。总回报模型用于检查价值相关性。本研究控制了预测范围，分别使用 Altman z 分数和 BigN/行业专业化审计指标来代表困境和审计质量。

发现

分析师在现金流预测形成过程中有效地调整了折旧的盈利预测，但未能有效地纳入营运资本变化。调查结果表明，对于陷入困境的公司和审计质量高的公司，现金流预测的准确性有所提高，这分别归因于分析师的保守主义和会计选择以及更准确的收益预测。现金流量预测对陷入困境的公司的价值相关性增加，特别是那些审计师质量高且预测及时的公司。

原创性/价值

据作者所知，这项研究是第一个在考虑财务困境和审计师质量的情况下检查分析师的现金流量预测，并控制分析师的预测范围。