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A Study on the Relationship between Analysts’ Cash Flow Forecasts Issuance and Accounting Information: Evidence from Korea

by 1 and 2,*
1
Department of Accounting, College of Social Sciences, Sunchon National University, Jeonnam 57922, Korea
2
School of Business, Hanyang University, Seoul 04763, Korea
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(12), 3399; https://doi.org/10.3390/su11123399
Received: 18 May 2019 / Revised: 15 June 2019 / Accepted: 17 June 2019 / Published: 20 June 2019
(This article belongs to the Section Economic and Business Aspects of Sustainability)
This study analyzes the relationship between the future cash flow forecast information provided by financial analysts and accounting information. We examine whether the joint issuance of financial analyst earnings forecasts and cash flow forecasts from 2011 to 2015 contributes to the information usefulness of Korean listed firms. The empirical results of this study are as follows. First, the issuance of analysts’ cash flow forecasts and earnings forecast accuracy were significant positive values. Cash flow forecast accuracy and earnings forecast accuracy were significant positive values. Second, the issuance of analysts’ cash flow forecasts and buy–sell bid spread are significant negative values. These results show that the information asymmetry between the manager and the investor can be reduced based on the rich information environment. This study suggests that cash flow forecasting information of financial analysts provides important evidence for capital market participants because it provides evidence that capital market participants’ information can be used as useful information for economic decision-making. These results show the sustainability of a firm from the viewpoint of a financial analyst who acts as an intermediary and external supervisor in the capital market. In addition, the analysts’ cash flow forecasting information is expected to reduce the information asymmetry between the company and the investor, thereby increasing the transparency and sustainability of the firm. View Full-Text
Keywords: analyst cash flow forecast; analyst earnings forecast; earnings forecast accuracy; information asymmetry; sustainability analyst cash flow forecast; analyst earnings forecast; earnings forecast accuracy; information asymmetry; sustainability
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MDPI and ACS Style

Oh, H.M.; Shin, H.y. A Study on the Relationship between Analysts’ Cash Flow Forecasts Issuance and Accounting Information: Evidence from Korea. Sustainability 2019, 11, 3399. https://doi.org/10.3390/su11123399

AMA Style

Oh HM, Shin Hy. A Study on the Relationship between Analysts’ Cash Flow Forecasts Issuance and Accounting Information: Evidence from Korea. Sustainability. 2019; 11(12):3399. https://doi.org/10.3390/su11123399

Chicago/Turabian Style

Oh, Hyun M.; Shin, Ho y.. 2019. "A Study on the Relationship between Analysts’ Cash Flow Forecasts Issuance and Accounting Information: Evidence from Korea" Sustainability 11, no. 12: 3399. https://doi.org/10.3390/su11123399

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