Ppt on cash flow statement analysis

Historical Financial Analysis Certificate course on valuation G. Chella Krishna,FCA CNGSN and Associates Please see acknowledgements on the last slide.

firms Sometimes difficult to interpret deviations in ratios Industry ratios may not be desirable targets Seasonality affects ratios Cash Flow Analysis Relevance Mechanism Calculation procedure Cash flow statement analysis Cash flow analysis- Relevance Here too, the idea is to assess the riskiness of the firm. How may this be approached, using cash flow analysis? Determine the length of the cash cycle as also its components (inventory, debtor and creditor turnovers). How strong is internal/


1 CHAPTER Overview of Financial Statement Analysis.

better reflect economic reality Financial Analysis Profitability analysis — Evaluate return on investments Risk analysis ——— Evaluate riskiness & creditworthiness Sources and uses — Evaluate source & of funds analysis deployment of funds Common tools Ratio analysis Cash flow analysis Process to evaluate financial position and performance using financial statements Prospective Analysis Intrinsic Value Business Environment & Strategy Analysis Accounting Analysis Financial Analysis Process to forecast future/


Introducing Financial Statements and Transaction Analysis Introducing Financial Statements and Transaction Analysis.

and Transaction Analysis Introducing Financial Statements and Transaction Analysis Flow of Costs Four Main Financial Statements Balance Sheet Balance Sheet Income Statement Income Statement Statement of Stockholders’ Equity Statement of Stockholders’ Equity Statement of Cash Flows Statement of Cash Flows The Financial Statements Balance Sheet – assets, liabilities and equity at one point in time Balance Sheet – assets, liabilities and equity at one point in time Income Statement – revenues, expenses/


FINANCIAL ANALYSIS ESSENTIALS © © Dr. George S. Vozikis Davis D. Bovaird Endowed Chair for Entrepreneurial Studies University of Tulsa.

of a venture or an organization. 3 Outline Financial Analysis The Accounting Process Bookkeeping Accounting Financial Statements The Balance Sheet The Income Statement The Accumulated Retained Earnings Statement Sources And Uses Of Funds (Cash Flow) Statement Analysis of Changes in Working Capital Financial Analysis Techniques Ratio Analysis Profit Analysis Cash Flow Analysis Breakeven Analysis Conclusion 4 FINANCIAL ANALYSIS FINANCIAL ANALYSIS refers to the systematic study of the current or potential/


Introduction To Financial Statement Analysis. Chapter Outline 2.1 Firms’ Disclosure of Financial Information 2.2 The Balance Sheet 2.3 The Income Statement.

2.1 Firms’ Disclosure of Financial Information 2.2 The Balance Sheet 2.3 The Income Statement 2.4 The Statement of Cash Flows 2.5 Other Financial Statement Information 2.6 Financial Statement Analysis 2.7 Financial Reporting in Practice Learning Objectives Know why the disclosure of financial information through financial statements is critical to investors Understand the function of the balance sheet Understand how the income/


Chapter 7 Funds Analysis, Cash-Flow Analysis, and Financial Planning.

complex cash flow statement. Helps you to better understand the cash flow statement, especially if it is prepared under the “indirect method.” Includes important noncash transactions while the cash flow statement does not. Is easy to prepare and often preferred by managers for analysis purposes over the more complex cash flow statement. Helps you to better understand the cash flow statement, especially if it is prepared under the “indirect method.” The Flow of Funds Statement: Flow of Funds Statement All/


1 1 Evaluating the Financial Health of Contractors Using Ratio Analysis Breakout Session D07 Juanita M. Rendon, MBA, CPA Tuesday, July 12, 2011 11:15.

of years. Can compare the financial strength of different companies. (Williams, Haka, Bettner, & Carcello, 2008) 70 Statement of Cash Flows Analysis 71 Cash Flows From Operating Cash Flows From Investing Cash Flows From FinancingPossible Explanation 1+ ̶̶ Operating cash flow being used to purchase long-term assets, pay down debt, and possibly pay dividends. 2+ ̶+ Operating cash flow and borrowed money being used to expand and possibly selling company stock to investors. 3 ̶ + ̶ Sale of/


FINANCIAL ANALYSIS Principles of Corporate Finance Tenth Edition Understanding Financial Statement Financial Statement Analysis Slides by Matthew Will.

Principles of Corporate Finance Tenth Edition Understanding Financial Statement Financial Statement Analysis Slides by Matthew Will McGraw-Hill/Irwin Dr Noryati Ahmad Understanding Financial Statements: Income statement Balance sheet Statement of Retained Earnings Statement of Cash Flows Understanding Financial Statements: Income statement Balance sheet Statement of Retained Earnings Statement of Cash Flows Dr Noryati Ahmad Why this topic matters to you? Management – Need to understand who are interested/


Discussion Notes.

Image Click on Images Source: Investopedia.com Financial Statements: Analysis Financial Statements: Introduction Financial Statements: Whos In Charge? Financial Statements: The System Financial Statements: Cash Flow Financial Statements: Earnings Financial Statements: Revenue Financial Statements: Working Capital Financial Statements: Long-Lived Assets Financial Statements: Long-Term Liabilities Financial Statements: Pension Plans Financial Statements: Conclusion Printer friendly version (PDF format) Source/


INTRODUCTION TO CASH FLOW ANALYSIS

managerial decisions about how to maximize wealth BUSINESS DECISIONS AND CASH FLOWS (CONT.) The Financial Accounting Standards Board’s perspective Requires that companies disclose a statement of cash flows The cash flow statement should provide equity investors and creditors with information to make judgments about the Amount of future cash flows Timing of future cash flows Uncertainty of future cash flows BUSINESS DECISIONS AND CASH FLOWS (CONT.) Cash flows and corporate life An entity’s life cycle stage/


Statement of Cash Flows

Now, we are ready to prepare the Cash Flow from Financing Activities portion of the Statement of Cash Flows. Cash Flow from Financing Activities Third item of additional information. Part I The Cash Flow from Financing Activities portion of the Statement of Cash Flows is shown on your screen. The first two cash flow items result from our analysis of Balance Sheet noncurrent liability and equity accounts. The cash dividend amount is the third item of/


Chapter 3 Working With Financial Statements

ratios and how do you compute specific ratios within each category? What are some of the problems associated with financial statement analysis? You should be able to: Summary Identify sources and uses of cash Understand the Statement of Cash Flows Understand how to make standardized financial statements and why they are useful Calculate and evaluate common ratios Understand the Du Pont identity Describe how to establish benchmarks/


Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 1 Understanding Financial Statements NINTH EDITION Lyn M. Fraser Aileen Ormiston.

and financing activities when this does and does not occur Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall4-43 Summary Analysis of the Statement of Cash Flows – Summary Table A way to common size the cash flow statement Shows the cash inflows as a percentage of total inflows Shows the cash outflows as a percentage of total outflows Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall4-44/


Understanding Financial Statements Seventh EDITION Lyn M. Fraser Aileen Ormiston Insert BOOK COVER.

, Inc.4-29 Statement of Cash FlowsCash flow from operating activities  Cash inflows  Cash outflows Should, at a minimum cover analysis of (C) 2004 Prentice Hall, Inc.4-30 Statement of Cash Flows Continued Statement of Cash Flows Continued  The success or failure of the firm in generating cash from operations  The underlying causes of the positive or negative operating cash flow Analyst Concerns: (C) 2004 Prentice Hall, Inc.4-31 Statement of Cash Flows Continued Statement of Cash Flows Continued  The/


1 Financial Statement Analysis: Key to Identifying Fraud Breakout Session # 803 Juanita M. Rendon, MBA, CPA April 7, 2009 11:00 AM – 12:30 PM.

Asset Valuation 15 Most businesses prepare : 1.Income Statement 2.Balance Sheet 3.Statement of Cash Flows 4.Statement of Stockholders’ Equity 5.Statement of Retained Earnings Overview of Financial Statements In the U. S., financial statements are based on Generally Accepted Accounting Principles (GAAP/ year. Current year – Previous year/Previous year x 100 = % change Ratio Analysis: Various ratios Financial Statement Analysis Methods (Brigham & Houston, 2007) 36 Why are ratios useful? Ratios can standardize/


Risk Analysis: An Extended Look Dr. Nancy Mangold California State University, East Bay.

Risk Analysis b Circumstances leading to need for the loan b Cash Flows b/Cash Flows b Tools for studying the cash-generating ability of a firm examination of the statement of cash flows for recent yearsexamination of the statement of cash flows for recent years computation of various cash flow-based financial ratioscomputation of various cash flow-based financial ratios study of projected financial statementsstudy of projected financial statements Statement of Cash Flows b Indicators of potential cash flow/


ANALYSIS OF FINANCIAL STATEMENTS. Analyzing Financial Statements We will be considering asset valuation. Financial asset values are a function of two.

asset values are a function of two variables: Discount rate ( the required rate of return) Expected future cash flows Financial statement analysis can be useful in estimating both of these valuation inputs. Major Financial Statements Corporate shareholder annual and quarterly reports must include: Balance sheet Income statement Statement of cash flows Reports filed with Securities and Exchange Commission (SEC) 10-K and 10-Q Generally Accepted Accounting Principles GAAP/


Analysis of Financial Statements N. Gopal Deputy General Manager, RBI CAB Pune.

how where they deployed- is not answered. Includes important non-cash transactions while the cash flow statement does not. Is easy to prepare and often preferred by managers for analysis purposes over the more complex cash flow statement. Helps you to better understand the cash flow statement, especially if it is prepared under the “indirect method.” Four good reasons for funds flow statement 1.It explains the financial consequences of business operations: Gives/


Cash Flows and Financial Analysis Chapter 3 © 2003 South-Western/Thomson Learning.

make decisions The orientation of financial analysis is critical and investigative 6 The Statement of Cash Flows Income doesn’t represent cash in the firm’s pocket The Statement of Cash Flows (AKA: Statement of Changes in Financial Position) provides info on the actual movement of cash in and out of the company Constructed from the Balance Sheet and Income Statement 7 How the Statement of Cash Flows Works—Preliminary Examples Requires two consecutive/


Scandals and Manipulation

optimistic assessment of operations & future performance expectations from the CEO or other executive(s) Financial Highlights Management Discussion & Analysis (MD&A) Financial Section Contents of the Financial Section Auditor’s Report Income Statement Balance Sheet Statement of Cash Flows Statement of Stockholders’ Equity Notes Operating Summary Management Discussion & Analysis Business Strategy—usually the best source of strategy & operating characteristics of the company A brief history & description of/


T3.1 Chapter Outline Chapter 3 Working With Financial Statements Chapter Organization 3.1Cash Flow and Financial Statements: A Closer Look 3.2Standardized.

Analysis 3.4The Du Pont Identity 3.5Using Financial Statement Information 3.6 Summary and Conclusions copyright © 2002 McGraw-Hill Ryerson, Ltd. CLICK MOUSE OR HIT SPACEBAR TO ADVANCE copyright © 2002 McGraw-Hill Ryerson, Ltd Slide 2 Working With Financial Statements - Introduction Chapter 2 - looked at the basic financial statement components; the balance sheet and income statement and the concept of cash flowCash Flow - cash flow identity - cash flow from assets = to cash flow/


Andrew Graham Queens University School of Policy Studies

cash flow? Isnt knowing if cash increased or decreased enough? Role of different line items Cash flow variances reflect behavioral shifts The Cash Flow Statement: the Basis for Cash Forecasting In the end, knowing about cash movements is not enough: encumbrances and anticipated risk or costs changes are not reflected Cash forecasting and financial reporting moves into the realm of bringing content, knowledge and numbers together From Cash Flow to Cash Forecasting: Financial Statements Financial analysis/


Chapter 3 Working With Financial Statements

ratios and how do you compute specific ratios within each category? What are some of the problems associated with financial statement analysis? You should be able to: Summary Identify sources and uses of cash Understand the Statement of Cash Flows Understand how to make standardized financial statements and why they are useful Calculate and evaluate common ratios Understand the Du Pont identity Describe how to establish benchmarks/


ANALYSIS OF FINANCIAL STATEMENTS

asset values are a function of two variables: Discount rate ( the required rate of return) Expected future cash flows Financial statement analysis can be useful in estimating both of these valuation inputs. Major Financial Statements Corporate shareholder annual and quarterly reports must include: Balance sheet Income statement Statement of cash flows Reports filed with Securities and Exchange Commission (SEC) 10-K and 10-Q Generally Accepted Accounting Principles GAAP/


Financial Statement Analysis

Maciejowska, Warszawa, 2008 - część I: Podstawy Rachunkowości Financial statements of companies dr A. Kocia financial statement analysis Part I Basic information on financial statement analysis dr A. Kocia Factors shaping the financial situation: External (1)/all cash receipts and cash disbursements that is cash flows dr A. Kocia Cash flow statement: Basic information (2) Cash flows are equal to the change in cash balance on balance sheet For the purposes of the cash flow statement, cash includes cash assets/


ANALYSIS OF FINANCIAL STATEMENTS

asset values are a function of two variables: Discount rate ( the required rate of return) Expected future cash flows Financial statement analysis can be useful in estimating both of these valuation inputs. Major Financial Statements Corporate shareholder annual and quarterly reports must include: Balance sheet Income statement Statement of cash flows Reports filed with Securities and Exchange Commission (SEC) 10-K and 10-Q Generally Accepted Accounting Principles GAAP/


©Cambridge Business Publishers, 2013 FINANCIAL STATEMENT ANALYSIS & VALUATION Third Edition Peter D. Mary LeaGregory A.Xiao-Jun EastonMcAnallySommersZhang.

and the balance sheet. ■ The statement of cash flows is linked to the income statement as net income is a component of operating cash flow. The statement of cash flows is also linked to the balance sheet as the change in the balance sheet cash account reflects the net cash inflows and outflows for the period. ©Cambridge Business Publishers, 2013 Information Beyond Financial Statements Management Discussion and Analysis (MD&A) Management Discussion and/


Cash Flow Estimation.

fixed assets, Tax consequences Steps in estimating Cash Flow Estimate the Income Statement Estimate the Balance Sheet Combine the income statement and balance sheet into a cash flow statement Make a decision Estimation of Income Statement Most business use an accrual basis - /not always imply final approval of a project. Final approval is often contingent upon a more detailed cash flow analysis in the appropriation request. Capital Budgets and Spending Not all large investments are part of the capital/


Reading & Understanding Basic Financial Statements …make better use of the information in financial statements 1 1.

+ ─ + ─ Statement of Cash Flows Analysis Operating Investing Financing General Explanation 5. 6. 7. 8. ─ + ─ + ─ Operating cash flow problems covered by sale of fixed assets, borrowing and owner contributions. Rapid growth, short falls in operating cash flow; purchase of fixed assets. Sale of fixed assets is financing operating cash flow shortages. Company is using reserves to finance cash flow short falls. Statement of Cash Flows The Example Company Statement of Cash Flows December 31, 2011 Cash Flows From/


FINANCIAL STATEMENT ANALYSIS RAJESH KEVIN SANJAY.

STATEMENTS BALANCE SHEET CASH FLOW STATEMENT EQUITY (Statement of Retained Earnings) Income Statement It shows managers and investors whether the company was profitable during the period being reported. Income statement is composed of Income; the business earnings over a period (e.g. sales revenue) Expenses; the cost incurred by the company over a period (e.g. salaries) ADVANTAGES AND DISADVANTAGES OF INCOME STATEMENTS Advantages Revenue Information Investor Analysis Disadvantages/


Revsine/Collins/Johnson: Chapter 6

. Bank now has a $50 million secured construction loan and a $200 million revolving credit line with Wilson. What do the company’s financial statements tell us about its credit risk? Credit analysis: Interpretation of cash flow components . Negative free cash flow Increased borrowing Continued dividend payment Credit analysis: Selected financial statistics Declining margin Customers take longer to pay, but reserve is smaller Larger debt burden Credit/


Financial Statement Analysis MGT-537 Dr. Hafiz Muhammad Ishaq 32

cash flow/total debt, operating cash flow per share, operating cash flow/cash dividend Lecture 25 & 26 Statement of Cash Flows Alternative cash flow Procedures for development of the Statement of cash flows Direct Method, Consolidated Cash Flow Statements Lecture 27 Impact of Changing Prices on Financial Statements Constant Dollar Accounting Current Cost Accounting Financial Reporting and Changing Prices Lecture 28 Practical Questions Statement Analysis for Special Industries: Lecture 29 Statement Analysis/


Prepared by: Dragan Stojanovic, CA Rotman School of Management, University of Toronto Chapter 22 Statement of Cash Flows Chapter 22 Statement of Cash Flows.

Second illustration – Eastern Window Products Limited Third illustration – Yoshi Corporation Presentation, Disclosure, and Analysis Disclosure requirements Presentation Illustrative examples Interpreting the statement of cash flows Free cash flow 3 Statement of Cash Flows Introduction to the Statement of Cash Flows Usefulness of the statement What is cash? Classification of cash flows Format of the statement IFRS/Private Enterprise GAAP Comparison Comparison of IFRS and private enterprise GAAP Looking ahead/


Review of Accounting Chapter 4.

The Firm’s Financial Statements Statement of Cash Flows Cash Inflow - Cash Outflow = Change in Cash From Investing: Sale of Fixed Assets + Purchase of fixed assets - Purchase of other firms - Cash Inflow - Cash Outflow = Change in Cash Statement of Cash Flows Cash Inflow - Cash Outflow = Change in Cash From Financing: Sale / Margin Net Income Sales $162 $1,450 Net Profit Margin = = 11.2% Ratio Analysis Profitability Ratios Net Income Return on Assets = Total Assets How effectively is the firm generating net /


Valuation: Part I Discounted Cash Flow Valuation

(looking at an average over time) should be used 2. The best place to find acquisitions is in the statement of cash flows, usually categorized under other investment activities The accounting definition of cap ex is too narrow. It excludes external cap ex/the next earnings report While many analysts forecast expected growth in earnings per share over the next 5 years, the analysis and information (generally) that goes into this estimate is far more limited. Analyst forecasts of earnings per share and/


The income statement reports the net income or net loss for an accounting period. The statement of changes in owner’s equity shows how the owner’s financial.

. The Statement of Cash Flows The Balance Sheet and the Statement of Cash Flows Section 9.3 The amount of cash the business took in The sources of cash Statement of Cash Flows The amount of cash the business paid out The uses of cash statement of cash flows A financial statement that summarizes the cash receipts and cash payments resulting from business activities during a period. Ratio Analysis What is ratio analysis? ratio analysis The Balance Sheet and the Statement of Cash Flows Section/


Copyright © 2012 Pearson Prentice Hall. All rights reserved. Chapter 4 Cash Flow and Financial Planning.

Statement of Cash Flows The statement of cash flows summarizes the firm ’ s cash flow over a given period of time. Firm ’ s cash flows fall into three categories: –Operating flows: cash flows directly related to sale and production of the firm ’ s products and services. –Investment flows: cash flows associated/ahead of the expectations of Wall Street experts who had projected EPS of $0.39. –In subsequent analysis, one analyst observed that of the three cents by which Cisco beat the street ’ s forecast, one/


Unit 3 Financial Analysis. Unit 3 Vocabulary Accounting Period Accounts Payable Accounts Receivable Accrual Basis Angel Assets Balance Sheet Bootstrapping.

Public Offering (IPO) Journal Journalizing Liabilities Net Profit on Sales Ratio Operating Capital Operating Ratio Unit 3 Vocabulary Owner’s Equity Posting Private Placement Pro forma Quick Ratio Ratio Analysis Risk Capital Statement of Cash Flows Stock Subchapter S Corporation Trade Credit Variable Expenses Venture Capital Venture Capitalists Working Capital Unit 3 Essential Question 1 (MKT-EN-4) What information is needed to compile/


Reporting the Statement of Cash Flows Chapter 12 PowerPoint Editor: Beth Kane, MBA, CPA Copyright © 2016 McGraw-Hill Education. All rights reserved. No.

of that tax. 49 12-A1: Cash Flow Analysis 50 Analyzing Cash Sources and Uses A1 Most managers stress the importance of understanding and predicting cash flows for business decisions. 51 Used, along with income-based ratios, to assess company performance. Cash flow on total assets = Operating cash flows Average total assets Cash Flow on Total Assets A1 52 12-P4: Spreadsheet Preparation of the Statement of Cash Flows 53 P4 A spreadsheet, also called/


Cash Accounting, Accrual Accounting, and Discounted Cash Flow Analysis Chapter 4.

value A firm reduces free cash flow by investing and increases free cash flow by reducing investments: free cash flow is partially a liquidation concept Note: analysts forecast earnings, not cash flows Discounted Cash Flow Analysis: Advantages and Disadvantages Partial Statement of Cash Flows: Dell Computer Reported Cash Flow from Operations Reported cash flows from operations in U.S. cash flow statements is after interest: Cash Flow from Operations = Reported Cash Flow from Operations + After-tax Net/


TRAINING TOOLS The Basics of Financing Agriculture Training Manual I Module 2.3 | Basics of the Cash Flow Statement.

experts with limited financial analysis training, and other professionals interested in agriculture financing DURATION1 hour BASICS OF THE CASH FLOW STATEMENT 3 Content 1.The Cash Flow Statement 2.Structure of a Cash Flow Statement 3.Case Study: Curtain shop – May 4.Differences: P&L vs. Cash Flow Statements 5.Using a Cash Flow Statement 6.Cash Flow as a cross-checking tool: Example BASICS OF THE CASH FLOW STATEMENT 4 1. The Cash Flow Statement Record of the cash inflow and outflow of an/


Bharat Sanchar Nigam Limited, India ALTTC, Ghaziabad -Ashwani Khurana Analysis of Financial Statements Cash Flow Statements.

Bharat Sanchar Nigam Limited, India ALTTC, Ghaziabad -Ashwani Khurana Analysis of Financial Statements Cash Flow Statements Bharat Sanchar Nigam Limited, India ALTTC, Ghaziabad Contents Financial Statement Analysis Cash Flow Statement Bharat Sanchar Nigam Limited, India ALTTC, Ghaziabad Financial Statements - Meaning The financial statements are nothing but the financial information presented in concise and capsule form, and the financial information is the information relating to the financial position of /


Chapter 14 ANALYSIS OF FINANCIAL STATEMENTS. Major Financial Statements Corporate shareholder annual and quarterly reports must include: Balance sheet.

Alternative Measures of Cash Flow Cash flow from operations Traditional cash flow equals net income plus depreciation expense and deferred taxes Also adjust for changes in operating assets and liabilities that use or provide cash Free cash flow recognizes that some investing and financing activities are critical to ongoing success of the firm Modifies cash flow from operations to reflect necessary capital expenditures and projected divestitures Purpose of Financial Statement Analysis Evaluate management/


Training Manual: The Basics of Financing Agriculture Module 2.3 | Basics of the Cash Flow Statement.

with limited financial analysis training, and other professionals interested in agriculture financing DURATION1 hour Module 2.3 | Basics of the Cash Flow Statement 3 Content 1.The Cash Flow Statement 2.Structure of a Cash Flow Statement 3.Case Study: Curtain shop – May 4.Differences: P&L vs. Cash Flow Statements 5.Using a Cash Flow Statement 6.Cash Flow as a cross-checking tool: Example Module 2.3 | Basics of the Cash Flow Statement 4 1. The Cash Flow Statement Record of the/


7-1. Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin 7 Earnings and Cash Flow Analysis.

a summary of a firm’s revenues and expenses –The Income Statement is over a specific accounting period, usually a quarter or a year. The Cash Flow Statement: –Is an analysis of the sources and uses of cash by the firm over an accounting period –Summarizes operating, investing, and financing cash flows 7-8 The Balance Sheet Asset - Anything a company owns that has value. Liability - A firm/


Reading & Analyzing Non-RE Business Ratios & Financial Statements for Commercial Funding Pre-Qualifications & Underwriting Thanks to Timothy W Koch, Bank.

certification exams.  Included is the step by step process of converting accrual accounting data into cash-based cash-flow statements. In general, we assume this is done for us in the statements we are given.  These are some of the additional ratios that an underwriter would use in the analysis of pro forma financials, but we do not expect that an originator has either the time/


ANALYSIS OF FINANCIAL STATEMENTS. Financial Statement Analysis Learning Objectives: After going through this lecture, you would be able to have a better.

going to help us in comprehending those analysis techniques. Basic Financial Statements: There are four basic financial statements that are prepared by the financial accountants for the use of the managers, creditors and investors of the company. These statements are a. Balance Sheet b. P/L or Income Statement c. Cash Flow Statement d. Statement of Retained Earnings (or Shareholders’ Equity Statement) Basic Financial Statements: The concepts that we are going/


FINANCIAL REPORTS &FINANCIAL STATEMENTS A DAC 501: FINANCIAL ACCOUNTING PRESENTATION. BY HERICK ONDIGO SCHOOL OF BUSINESS, UoN.

of the International Financial Reporting Standards, International Accounting Standard No.7 in particular (IAS 7). Statement of Cash Flows cont…  The statement of cash flows presents the changes in cash resulting from business activities.  Cash flow analysis is necessary to make proper Investing and Financing decisions and also to maintain operations. Statement of Cash Flows cont…  Cash flows are Classified by business activity:  Operating activities.  Investing activities and  Financing activities/


Current Assets Chapter 6. Cash and Cash Equivalents Cash is listed first in the current assets section because it is the most liquid of the assets. –

a monthly listing of deposits and withdrawals. Analysis of Cash The most informative analysis of cash pertains to cash flows. Analysis of Cash While the statement of cash flows analyzes a firms inflows and outflows of cash, the balance sheet simply gives a total for Cash as of a given date. Analysis of Cash The Cash to Current Liabilities Ratio is calculated by dividing current liabilities into Cash. Analysis of Cash Recall that the current and acid-test ratios/


(C) 2007 Prentice Hall, Inc.5-1 The Analysis of Financial Statements Ratios are tools and their value is limited when used alone. The more tools used,

(C) 2007 Prentice Hall, Inc.5-61 Equity Analysis Provides information regarding 1. The future cash flow generating ability of the firm 2. The growth (or lack thereof) of those cash flows 3. The risk of those cash flows, and 4. The risk-free rate commanded by /Bloomberg, Baseline  Search for a combination of characteristics (C) 2007 Prentice Hall, Inc.5-64 Five Steps of a Financial Statement Analysis  Who are you and why are you interested in this company?  What questions would you like to have answered? /


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