The quality of analysts' cash flow forecasts

Dan Givoly*, Carta Hayn, Reuven Lehavy

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

99 Scopus citations


This study examines properties of analysts' cash flow forecasts and compares them to those exhibited by analysts' earnings forecasts. Our results indicate that analysts' cash flow forecasts are less accurate than analysts' earnings forecasts and improve at a slower rate during the forecast period. Further, cash flow forecasts appear to be a naive extension of analysts' earnings forecasts, thus providing limited information on expected changes in working capital. We also find that analysts' forecasts of cash flows are of limited information content and are only weakly associated with stock returns. Finally, estimating expected accruals as the difference between analysts' earnings forecasts and their cash flow forecasts does not result in a better detection of earnings management than achieved by commonly used accrual models.

Original languageEnglish
Pages (from-to)1877-1911
Number of pages35
JournalAccounting Review
Issue number6
StatePublished - Nov 2009
Externally publishedYes


  • Accruals
  • Analysts' cash flow forecasts
  • Earnings forecasts
  • Earnings management
  • Forecast accuracy


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