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

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  • Xiaomeng Chen
  • Meiting Lu
  • Yaowen Shan
  • Yizhou Zhang

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.

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  • Xiaomeng Chen & Meiting Lu & Yaowen Shan & Yizhou Zhang, 2021. "Australian evidence on analysts' cash flow forecasts: issuance, accuracy and usefulness," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 3-50, March.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:1:p:3-50
    DOI: 10.1111/acfi.12552
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