CONTENT AND NON-TRADITIONAL WAYS OF USING CASH FLOW ANALYSIS OF NON-STATE CORPORATE STRUCTURES

Non-state corporate structures, which are the most widespread subjects of Russian business, do not have direct state influence and significant support, and are the most severely affected by the global pandemic of 2019–2020, are increasingly facing a situation of their own insolvency.50 Экономические системы. 2020. № 2 Economic Systems. 2020. No. 2 In these conditions, financial managers of non-state corporate structures try to plan the distribution of their funds more clearly and devote significant influence to their analysis. The author defines the concept of cash flow analysis of non-state corporate structures corresponding to its modern content. The article presents the author's systematization of methods for analyzing cash flows used by non-governmental corporate structures on the basis of the following features: by time interval, by the sources of information used, by the content of the main methodological techniques, by the traditional direction of potential use. The time interval was used for retrospective, operational and forecast analysis of cash flows of non-state corporate structures. According to the sources of information used in the analysis of cash flows, it was detailed into external, internal and mixed. According to the content of methodological techniques, analytical procedures used in the analysis of cash flows in non-state corporate structures are a direct method of analyzing cash flows, an indirect method of analyzing cash flows and coefficient methods of analyzing cash flows. Based on the traditional nature of the potential use areas, we have identified traditional and non-traditional (relatively new) areas of use of cash flow analysis of non-state corporate structures that have become traditional in recent years. The article provides a brief description of direct, indirect and coefficient methods for analyzing cash flows of non-state corporate structures and describes the directions of their use. The main directions of their application are considered: determining the main types of proportions of cash receipts and outflows and distribution of cash flows by type of activity; calculating the net cash flow based on net profit and its adjustments; calculating the coefficients of sufficiency and efficiency of cash flows. The greatest attention is paid to the directions of non-traditional use of methods of cash flow analysis that solve certain tasks of financial management: assessing the feasibility of local financial solutions, determining the synchronicity and uniformity of inflows and outflows, eliminating short-and medium-term cash gaps, determining the level of tax costs, determining the ability of the organization to repay various types of obligations

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A practical framework to evaluate and report combined natural resource and production outcomes of agricultural research to livestock producers

Australian Journal of Experimental Agriculture ◽

10.1071/ea02210 ◽

2003 ◽

Vol 43 (8) ◽

pp. 745 ◽

Cited By ~ 8

Author(s):

R. Barlow ◽

N. J. S. Ellis ◽

W. K. Mason

Keyword(s):

Cash Flow ◽

Natural Resource ◽

Agricultural Research ◽

Full Range ◽

Flow Analysis ◽

Cash Flows ◽

Production Data ◽

Sufficient Information ◽

Management Skills ◽

Experimental Treatments

The specifications for this study were set by the need for researchers in the Sustainable Grazing Systems (SGS) Program to have a consistent framework to evaluate experimental results across research sites and to share those results in a comprehensive way with livestock producers, allowing them to consider the full range of outcomes and impacts. To achieve this, the framework needed to account for production, economic and natural resource impacts, and other issues associated with making changes on farms. It also had to be easily applied, and readily understood by all segments of the SGS Program. This approach demanded some elements of pragmatism. Economic analysis of production data was based around net cash flow analysis. Spreadsheet programs were written for beef, self-replacing Merino and prime lamb enterprises. These incorporated the capacity to graph results automatically, provide sensitivity analysis tables, and project net cash flow results averaged over a 10-year period. Net cash flows were given for 2 levels of management skills — 'district average' and 'high'. Placing dollar values or costs on resource impacts was not as simple and could not be achieved within the practical framework required. A qualitative approach to the evaluation of resource impacts was developed in collaboration with researchers, advisors and collaborating producers. A framework was constructed which allows the likely on- and off-farm impacts of any experimental treatments to be identified and subjectively rated for likely importance.A practical tool for integrating and reporting the production and resource impact information was constructed. This captures the net cash flow, the key production data, the off-farm and on-farm impacts and provides an overview assessment of the treatment in a simple table. It provides producers with sufficient information to allow an assessment as to whether adoption of any 'treatment' could improve the profitability and sustainability of their grazing system. This tool was tested across all treatments at the SGS National Experiment sites and found to work well. Examples are presented, covering a range of resource impact and net cash flow combinations.

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Managing cash flow. Practicum

10.12737/textbook_5d44309e62ba47.11888181 ◽

2019 ◽

Author(s):

Павел Жуков ◽

Pavel Zhukov

Keyword(s):

Corporate Finance ◽

Cash Flow ◽

Financial Management ◽

Cash Flows ◽

Educational Programme ◽

Flow Management ◽

General Manager ◽

Cash Flow Management ◽

Financial Profile

Textbook "managing cash flow" is based on a similar discipline which is part of the educational programme of the Financial University for training Bachelors to direction of preparation 38.03.02 "management", financial profile. Discipline treats all topics of general courses in financial management and corporate finance. Difference of discipline is that it focuses on cash flow management (rather than capital, profitability, etc.) and consequently, the discipline examines corporate finance and financial management in terms of cash flow management. Cash flow management is usually the essence of the work of a Finance Manager, and it treats activities of an Organization in terms of cash flows. That is usually a feature of outlook of financial manager and distinguishes it from other managers. Due to the nature of their work, financial managers must also bear in mind the issues of competitiveness, efficiency, profitability and sustainability of the company, which commonly are the focus of the General Manager. The workshop aims to develop the skills necessary for this activity.

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Arborista, Inc.: An Instructional Resource Case

Issues in Accounting Education ◽

10.2308/iace-50452 ◽

2013 ◽

Vol 28 (3) ◽

pp. 681-690 ◽

Cited By ~ 2

Author(s):

Marc P. Picconi ◽

Kimberly J. Smith ◽

Alexander Woods

Keyword(s):

Cash Flow ◽

Direct Method ◽

Cash Flows ◽

Integrated System ◽

Net Income ◽

Managerial Accounting ◽

Early Integration ◽

Operating Cash Flows ◽

Cash Flow Statement ◽

Statement Of Cash Flows

ABSTRACT: This deceptively simple case is intended for use as early as the first day of an M.B.A. core accounting course or as a focused review for an undergraduate accounting course. It achieves three primary objectives: accelerating student learning about the statement of cash flows, emphasizing the importance of both the cash flow statement and the income statement in valuation and capital markets, and introducing the three primary financial statements as an integrated system. The case also features the use of the direct method of presenting operating cash flows, both as a pedagogical tool and to allow interested instructors to increase their focus on that method. We have found that students benefit from the early integration of the cash flow statement, as well as the ability to clearly understand how operating cash flows are similar to—and different from—net income. Finally, the case provides an optional managerial accounting module for instructors who teach a course that integrates financial and managerial accounting.

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Prior credit assessment of long-term SME projects with non-standard cash flows

Banks and Bank Systems ◽

10.21511/bbs.16(2).2021.14 ◽

2021 ◽

Vol 16 (2) ◽

pp. 148-158

Author(s):

Serhii Onikiienko ◽

Yevheniia Polishchuk ◽

Alla Ivashenko ◽

Anna Kornyliuk ◽

Nazar Demchyshak

Keyword(s):

Cash Flow ◽

Flow Analysis ◽

Estimation Algorithm ◽

Cash Flows ◽

Economic Life ◽

Bank Loan ◽

Preliminary Evaluation ◽

Value Based Management ◽

Loan Demand

Over the past three decades, the relative bank loan demand has changed due to the arising small and medium-sized enterprises (SMEs). Therefore, banks in their operations face the problem of processing an ever-increasing number of loan applications. The aim of this paper is to develop an auxiliary approach to assessing the prior creditworthiness of long-term SME projects with nonstandard cash flows.This study reveals how the principles of value-based management can be incorporated into the process of borrower’s creditworthiness assessment to improve the process of screening loan applications. For this, the internal rate of return was used as a criterion for loan granting decision at the initial stage of loan underwriting.An algorithm for the preliminary evaluation of loan applications is proposed and is based on the principle of maximizing the shareholder value of banks. This algorithm helps to define the credit terms taking into consideration the distribution of positive cash flows throughout the project’s expected economic life, calculate the possible real effective interest rate concerning the borrower’s nonstandard cash flow schedule, make a rough analysis on the economic efficiency of lending and state the necessary criterion to initiate the procedure of loan underwriting for the projects with nonstandard cash flow schedules. The proposed estimation algorithm stemming from the IRR-approach for the cash flow analysis can also be initially used by a borrower as a tool for credit solvency self-testing via screening of periods with corresponding cash flows that can be used for loan servicing.

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The usefulness of operating cash flow information: Does format matter?

Corporate Ownership and Control ◽

10.22495/cocv10i1art4 ◽

2012 ◽

Vol 10 (1) ◽

pp. 44-52 ◽

Cited By ~ 2

Author(s):

Shadi Farshadfar

Keyword(s):

Cash Flow ◽

Indirect Method ◽

Direct Method ◽

Cash Flows ◽

Indirect Methods ◽

Flow Information ◽

Operating Cash Flow ◽

Future Cash Flows ◽

Direct And Indirect Methods ◽

Level Analysis

This study investigates whether the direct method of presenting cash flows from operations is superior to the indirect method in its ability to forecast future cash flows. It also considers the effect of industry characteristics on the relative usefulness of direct and indirect methods of cash flow presentation. The study, which uses a sample of Australian firms, finds that both the direct and indirect methods improve the forecast of future cash flows. However, the indirect method of reporting cash flows from operations is more relevant than the direct method in predicting future cash flows. Evidence from the industry-level analysis overall reinforces the main results.

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Aurora Textile Company

Darden Business Publishing Cases ◽

10.1108/case.darden.2016.000031 ◽

2017 ◽

pp. 1-14

Author(s):

Kenneth M. Eades ◽

Lucas Doe

Keyword(s):

Cash Flow ◽

Financial Distress ◽

Textile Industry ◽

Capital Investment ◽

Investment Decision ◽

Flow Analysis ◽

Cash Flows ◽

List Type ◽

Discounted Cash Flow ◽

Cost Information

This case asks the student to decide whether Aurora Textile Company can create value by upgrading its spinning machine to produce higher-quality yarn that sells for a higher margin. Cost information allows the student to produce cash-flow projections for both the existing spinning machine and the new machine. The cash flows have many different cost components, including depreciation, the number of days of cotton inventory, and the liability costs associated with returns from retailers. The cost of capital is specified in order to simplify the analysis. The analysis has added complexity, however, owing to the troubled financial condition of both the company and the U.S. textile industry, which is in decline as manufacturers migrate to Asia to benefit from lower manufacturing costs. This begs the question whether management should invest in a declining business or harvest the company by paying out all profits as a dividend to the owners. The case is suitable for students just beginning to learn finance principles, but is also rich enough to use with experienced students and executives. The primary learning points are as follows: The basics of incremental-cash-flow analysis: identifying the cash flows relevant to a capital-investment decision The construction of a side-by-side discounted-cash-flow analysis for a replacement decision How to adapt the NPV decision rule to a troubled or dying industry The effect of financial distress on the NPV calculation The importance of sensitivity analysis to a capital-investment decision

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Voluntary Income Reporting

Accounting Horizons ◽

10.2308/acch-50727 ◽

2014 ◽

Vol 28 (2) ◽

pp. 277-295

Author(s):

Philip Beaulieu

Keyword(s):

Cash Flow ◽

Value Relevance ◽

Direct Method ◽

Cash Flows ◽

Information Value ◽

Fund Flows ◽

Litigation Risk ◽

Significant Information ◽

Income Reporting ◽

Cash Flow Statement

SYNOPSIS This paper proposes a voluntary income-reporting regime, in which firms could choose whether to publish an income statement. Firms choosing not to issue it would report fund flows in a cash flow statement employing the direct method, similar to the cash flow statement advocated by Ohlson et al. (2010). Voluntary income reporting is motivated by managers' numerous motives to manipulate earnings, recent research challenging the value relevance of earnings compared to cash flows, and costs of auditing income, including litigation risk. Another motivation for voluntary income reporting is rising investor dissatisfaction with reported earnings, but unlike many critics in the investing community, the paper does not claim that earnings do not have significant information value. Rather, given recent developments, it is worth reconsidering whether the benefits of reporting accrual earnings exceed the costs for all firms.

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Cash flows of enterprises: their assessment and analysis

Ekonomìka ta upravlìnnâ APK ◽

10.33245/2310-9262-2018-143-2-86-93 ◽

2018 ◽

pp. 86-93

Author(s):

T. Okhrymovych ◽

L. Gutko

Keyword(s):

Cash Flow ◽

Financial Stability ◽

Crop Production ◽

Continuous Process ◽

Flow Analysis ◽

Research Direction ◽

Cash Flows ◽

Agricultural Enterprise ◽

Dairy Cattle Breeding ◽

Operating Activities

The processes taking place in the economy in recent decades clearly demonstrate that the economic and social stability of society depends on the financial stability of enterprises. One of the most important signs of financial stability is the ability of an enterprise to generate cash flows. The presence of money from the enterprise determines the possibility of its survival and directions for further development. Any company in the course of its activities has a need for financial resources necessary for the implementation of relationships with other legal entities and individuals. The uninterrupted circulation of cash flows in the reproduction process means the fulfillment of obligations to the budget, partners, the absence of overdue debts to the enterprise and the enterprise itself, normal solvency, necessary financial stability, creditworthiness and profitability. The cash flow of an enterprise is a continuous process. For each direction of funds use there must be an appropriate source. In a broad sense, the assets of an enterprise represent the net use of cash, and liabilities and equity are net sources. A research aim was to conduct the all-round analysis of enterprise money forming streams, estimate the degree of sufficientness and efficiency for providing of their balanced and synchronization. For realization of the put aim tasks are pulled out: to find out the value of money streams in activity of menage subjects; to conduct the analysis of certain enterprise money forming streams; to carry out the estimation of composition, dynamics and efficiency of enterprise money streams management. Research methodology is folded by the scientific methods of cognition and special, in particular, economic and statistical methods (comparison, grouping, tabular, graphic, standardizations of investigated phenomena indexes), economic and logical methods (elimination, vertical, horizontal, coefficient analysis) which provided the solution of the tasks in the chosen research direction. The article discusses the nature and characteristics of cash flows. The above classification and sources of cash flow. On the example of agricultural enterprise "Sloboda " was estimated efficiency of cash flow. The main activities of the enterprise are: the cultivation of grain crops (except rice), legumes and oilseeds; breeding dairy cattle; breeding pigs; sugar production; breeding other animals; auxiliary activities in crop production. The input streams of this company are 100% solely cash from operating activities. Having considered the structure of the PSP “Sloboda” initial cash flows for 2015-2017, we can say that the main share of cash flows from operating activities (80-90%), from investment activities – 10-20%. Conclusions were made on improving the efficiency of cash flows. With the aim to increase cash flows of private agricultural enterprise "Sloboda" management efficiency it is necessary: to attract in practice the calculation of money streams indexes system as measuring devices of financial firmness and solvency; to study area conformities of money law streams and take them into account in practice and analysis of enterprise; to determine streams in registration, including operative, and information for timely forming of the extended dataware of enterprises cash flow analysis; to perfect money streams methodology of analysis; to take into account the factors of enterprise money motion in the conditions of vagueness and risk. Key words: cash, incoming cash flows, cash outflows, cash flow analysis, efficiency, profitability, liquidity, agricultural enterprise.

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International Harmonisation Of Accounting Standards: The Case For A Mandatory Requirement For The Direct Method Of Reporting Operating Cash Flows

International Business & Economics Research Journal (IBER) ◽

10.19030/iber.v3i3.3673 ◽

2011 ◽

Vol 3 (3) ◽

Author(s):

Christine Yap

Keyword(s):

New Zealand ◽

Cash Flow ◽

Financial Reporting ◽

Indirect Method ◽

Direct Method ◽

Accounting Standards ◽

Cash Flows ◽

International Accounting ◽

International Accounting Standards ◽

Operating Cash Flows

Even though standard setters have now embraced cash flow statements there remains ambivalence as to the best format (i.e. direct or indirect method) for disclosing cash flow from operations. In 1987 the FASB asserted that information about the gross amounts of cash receipts and cash payments is more relevant than information about the net amounts of cash receipts and payments. Yet apart from Australia and New Zealand, most standard setting bodies, including the International Accounting Standards Board (IASB), permit a choice between the direct and indirect methods. When given this choice, the vast majority of companies have opted for the indirect method of reporting operating cash flows (OCFs).This difference in OCF presentation between jurisdictions is relevant in this era of harmonisation of accounting standards: both the European Union parliament and the Australian Financial Reporting Council have decided to set 2005 as the target date for the adoption of standards produced by the IASB. Underlying this policy of verbatim adoption of international accounting standards, presumably is the belief that adoption of standards issued by the IASB would lead to an improvement in financial reporting. Such a view was presented recently when current Australian accounting standards were criticised as being deplorable by the Chairman of the IASB, David Tweedie (Australian Financial Review, 5 August 2003, p.1). Yet by reviewing the literature on cash flow statements, this paper argues that not all Australian standards would be improved by adopting international standards. In the case of cash flow reporting, maybe the IASB should review its standard and accept the lead of Australia and New Zealand, by not permitting choice of method and mandate the direct method: surely an intended consequence of harmonisation is to narrow areas of difference and variety in accounting practice.

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A Research Note On The Issue Of Non-Articulation And The Method Used To Calculate Net Operating Cash Flow

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v25i1.1048 ◽

2011 ◽

Vol 25 (1) ◽

Cited By ~ 2

Author(s):

Terry J. Ward ◽

Jon Woodroof ◽

Benjamin P. Foster

Keyword(s):

Cash Flow ◽

Indirect Method ◽

Direct Method ◽

Accounting Standards ◽

Cash Flows ◽

Financial Accounting ◽

Financial Accounting Standards Board ◽

Font Size ◽

Operating Cash Flow ◽

Statement Of Cash Flows

Using a proxy for nonarticulation, prior researchers found evidence that many companies using the indirect method of reporting net cash flow from operations have a significant level of nonarticulation.  The purpose of this study is to determine if companies using the direct method of reporting net cash flow from operations experience significantly lower levels of nonarticulation than companies that use the indirect method of reporting net cash flow from operations.  Results show that companies using the direct method have significantly less nonarticulation than companies using the indirect method.  This finding suggests that the Financial Accounting Standards Board (FASB) should consider requiring companies to use the direct method of preparing the Statement of Cash Flows.

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