Recent articles in accounting research indicate that managers of some firms place great importance on meeting or beating analysts』 earnings forecasts (MBE). Many articles also provide evidence that investors and analysts are now paying more attention to cash flow than previously. Beside meeting or beating analysts』 earnings forecasts, this study explores whether managers also take actions to meet or beat analysts』 cash flow forecasts (MBCF). The first part of this study investigates whether meeting or beating analysts』 cash flow forecasts is also a notion well entrenched in today's corporate culture, and the consequences of meeting or beating analysts』 cash flow forecasts. First, we discuss whether there is an increasing trend of MBCF. Next, we test whether, after controlling for the cash flow forecast error, there is a market premium to firms that meet or beat analysts』 cash flow forecasts. Third, we explore whether firms managers manage real activities or cash flow expectations to avoid negative cash flow surprise. Finally, we explore the predictive ability of MBCF with respect to future performance and stock returns to provide explanations for the premium to MBCF. The second part of this study will investigate the relation of MBE and MBCF and related issues. We first discuss whether MBE and MBCF are related. Second, we compare the premium to MBE and MBCF ; for firms meeting or beating analysts』 earnings forecasts (meeting or beating analysts』 cash flow forecasts), we discuss whether there are additional rewards when they also meet or beat analysts』 cash flow forecasts(meet or beat analysts』 earnings forecasts). Third, we discuss the relationship of MBE,MBCF, earnings management and expectations management. Finally, we discuee the relation of MBE and MBCF with respect to future performance and stock returns. The third part of this study will investigates the characteristics of firms that meet or beat analysts』 cash flow forecasts. We first test a number of hypotheses about managers』 incentives to avoid negative cash flow surprises. We expect that firms with the following characteristics are more likely to meet or beat analysts』 cash flow forecasts: (1) higher absolute accrual; (2) negative earnings; (3) meeting or beating analysts』 earnings forecasts; (4) higher cash flow incremental information content; (5) higher capital intensity; (6) poorer financial health; (7) larger cash flow analyst following; (8) shorter age. Second, we test whether firms with the above characteristics are more likely to engage in manipulating real activities and guiding analysts』 forecasts downward. Third, we test whether the stock premium to MBCF is higher for firms with the above characteristics. 研究期間 : 9808 ~ 9907
