This paper revisits the whys and hows of cash flows analysis. In a context of equity valuation, three aspects are considered. First, we consider why there is demand for an analysis of cash flows that complements GAAP’s income statement. The issues here pertain to the ambiguity inherent in...

A recent paper by Ohlson and Juettner-Nauroth (2005) develops a model in which a firm's expected earnings and their growth determine its value. At least on its surface, the model appeals because it embeds the core principle used in investment practice and, further, generalizes the Constant...

Applying the framework of conditional event studies shows that equity issues reveal managers' private information about stock mispricing, which investors only partially discount into stock prices at the seasoned equity offering (SEO) announcement date. Negative abnormal returns occur as prices...

Purpose: This study aims to evaluate the earnings forecasting models of Hou et al. (J Account Econ, 53:504–526, 2012) and Li and Mohanram (Rev Account Stud, 19:1152–1185, 2014) in terms of bias and accuracy and validity of the implied cost of capital (ICC) estimates for a sample of initial...

This study documents that analysts are more likely to issue revenue forecasts to complement earnings-per-share estimates (EPS) when the quality of firm financial reporting is low. This is because compared to EPS forecasts accuracy, revenue forecast accuracy is less adversely affected by poor...

Applying the framework of conditional event studies shows that equity issues reveal managers‟private information about stock mispricing, which investors only partially discount into stockprices at the seasoned equity offering (SEO) announcement date. Negative abnormal returnsoccur as prices...

Applying the framework of conditional event studies shows that equity issues reveal managers' private information about stock mispricing, which investors only partially discount into stock prices at the seasoned equity offering (SEO) announcement date. Negative abnormal returns occur as prices...