True or false

136 137 Required Homework Questions 138 139 Forecasts are only used to establish budgets. 140 Forecasts may be qualitative or quantitative. 141 Forecasts are generally focused on the next months. 142 Forecasting is quite different than Financial Statement Analysis 143 Normalized Earnings focus on predicting one-time and non-recurring items. 144 The concept of earnings power is the long-term (3 to 5 year) expectation of the company's earnings after any near-term anomalous behavior has passed. 3531 354 355 356 357 358 359 360 361 362 363 Companies frequently issue financial guidance for the next quarter and year's financial outlook. Equity valuations are relatively insensitive to the consensus estimate. The average of the sell-side equity analyst earnings estimates is called the 'Consensus'. A sell-side analyst publishes research reports that only include an investment rating. It is more important now than ever that analysts consider companies' strategic uses of cash flows when creating high quality forecasts of future financial performance Strategic uses of cash is not important to a financial analysts in making forecasts. A defensible forecast is one where the company forecasts are in sync with the investment thesis or story. Analysts must perform an in-depth Fundamental Analysis to make forecasts reflecting a basic understanding of the company. All forecasts should reflect an investment thesis, be it positive or negative