This study examines whether foreign cash holdings increase the complexity of analysts’ forecasting tasks, thereby affecting their earnings forecasts’ properties. In forecasting future earnings, analysts face uncertainty in understanding the firm’s economic situation, especially if cash is held by foreign subsidiaries – given that it may be subject to investment inefficiencies. The lack of disclosure about foreign cash makes it difficult for analysts to anticipate and fully incorporate in their estimates the negative performance consequences of foreign cash holdings. Using a sample of U.S. multinational corporations and estimating their foreign cash holdings, we show that a firm with an average level of estimated foreign cash to total assets has a 12.5% higher forecast error and a 13.7% higher forecast dispersion (relative to firms without foreign cash). Moreover, we document that estimated foreign cash is negatively associated with future performance and that, in the presence of large amounts of foreign cash, financial analysts issue more optimistic forecasts. Cross-section analyses show that estimated foreign cash holdings affect analysts’ forecasts to a larger extent in the absence of disclosure, consistent with the idea that the lack of disclosure restricts financial analysts’ ability to fully incorporate in their estimates the effect of foreign cash.

本研究检验外国现金持有量是否增加了分析师预测任务的复杂性，从而影响了他们的盈利预测的属性。在预测未来收益时，分析师在了解公司的经济状况时面临着不确定性，特别是如果现金由外国子公司持有——因为它可能会受到投资效率低下的影响。缺乏关于外国现金的披露使得分析师难以预测并在他们的估计中充分考虑持有外国现金的负面业绩后果。使用美国跨国公司样本并估算其持有的外国现金，我们表明，一家估计外国现金占总资产平均水平的公司的预测误差要高 12.5% 和 13. 预测离差高 7%（相对于没有外国现金的公司）。此外，我们记录了估计的外国现金与未来业绩呈负相关，并且在存在大量外国现金的情况下，金融分析师会发布更乐观的预测。横截面分析表明，在没有披露的情况下，估计的外国现金持有量会在更大程度上影响分析师的预测，这与缺乏披露限制金融分析师将外国现金的影响充分纳入其估计的能力的观点一致。