I examine the impact of management cash flow forecasts on investors and analysts. The news in management cash flow forecasts is priced beyond total earnings news. Analysts revise earnings forecasts more for the news in these forecasts than for the news in accruals. I further find that the market’s higher pricing of cash flow forecast news is greater for firms 1) with bad earnings news, 2) in fi...

a r t i c l e i n f o We re-evaluate the cash flow–investment relation from a new angle in a setting where the firm can access capital markets and faces different investment opportunity sets. Instead of replying on cash flow, we introduce other forms of finance to interact with investment. We find that financial variables enter significantly into the investment regressions at different timing. ...

Purpose The ability to predict cash demand is crucial for the operation of construction companies. Reliable cash flow prediction during the execution phase can help managers to avoid cash shortages and to control project cash flow effectively. Method This paper presents a new inference model, CF-ELSIMT, for cash flow forecasting. The developed CF-ELSIMT utilizes weighted Least Squares Support V...

Debt Policy, Corporate Taxes, and Discount Rates This paper studies the valuation of assets with debt tax shields when debt policy is a general time-dependent function of the asset’s unlevered cash flows, value, and history. In a continuous-time setting, it shows that the value of a project’s debt tax shield satisfies a partial differential equation, which simplifies to an easily solved ordinar...

Unexpectedly severe winter weather, which is arguably exogenous to firm and bank fundamentals, represents a significant cash flow shock for bank-borrowing firms. Firms respond these shocks by drawing on increasing the size of their credit lines. Banks charge borrowers this liquidity via increased interest rates less borrower-friendly loan provisions. Credit line adjustments occur within one cal...