Analysts’ Cash Flow Forecasts are Not Sophisticated: a Rebuttal of Call, Chen and Tong (2013)

8 Pages Posted: 24 Jul 2013

See all articles by Dan Givoly

Dan Givoly

Pennsylvania State University, Smeal College of Business

Carla Hayn

University of California at Los Angeles - Anderson School of Management

Reuven Lehavy

University of Michigan, Stephen M. Ross School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: July 2013

Abstract

Call, Chen and Tong (2013) claim that the conclusion we reached in Givoly, Hayn and Lehavy (2009) that analysts’ forecasts of cash flow from operations are unsophisticated (in the sense that they can be replicated by a naïve extension of analysts’ own earnings forecasts) is wrong. They conclude that these forecasts are, in fact, sophisticated. Call et al.’s claim is based on inappropriate and contradictory tests and their interpretation of their own evidence suffers from serious logical flaws. In fact, rather than raising doubts about our conclusions, the evidence in Call et al. reinforces them.

Keywords: analysts, cash flow forecasts, sophistication

Suggested Citation

Givoly, Dan and Hayn, Carla and Lehavy, Reuven, Analysts’ Cash Flow Forecasts are Not Sophisticated: a Rebuttal of Call, Chen and Tong (2013) (July 2013). Available at SSRN: https://ssrn.com/abstract=2297608 or http://dx.doi.org/10.2139/ssrn.2297608

Dan Givoly (Contact Author)

Pennsylvania State University, Smeal College of Business ( email )

305 Business Building
University Park, PA 16802
United States
814-865-0587 (Phone)
814-863-8393 (Fax)

Carla Hayn

University of California at Los Angeles - Anderson School of Management ( email )

D410 Anderson Complex
Los Angeles, CA 90095-1481
United States
310-206-9225 (Phone)

Reuven Lehavy

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI 48109
United States
734-763-1508 (Phone)
734-936-0282 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
261
Abstract Views
961
rank
82,489
PlumX Metrics