Search results

1 – 10 of over 24000
To view the access options for this content please click here
Article
Publication date: 1 January 1995

H.Y. Hung, Monica Chan and Annie Yhi

Use of cash flow reporting has been in the rise for the past few years to ensure that cash flows are reported in a form that highlights the significant components of cash

Abstract

Use of cash flow reporting has been in the rise for the past few years to ensure that cash flows are reported in a form that highlights the significant components of cash flow and facilitates comparison of the cash flow performance of different business. Because there are direct and indirect methods of preparing such statements, this paper is to examine the usefulness of the cash flow statements in Hong Kong context using empirical study. It was suggested from the findings that cash flow statements are preferred by a lot of users.

Details

Asian Review of Accounting, vol. 3 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

To view the access options for this content please click here
Article
Publication date: 1 July 2006

Leonie Jooste

The purpose of this paper is to compare companies in a developing country with those of a first‐world country. For this purpose South African (SA) companies in the…

Abstract

Purpose

The purpose of this paper is to compare companies in a developing country with those of a first‐world country. For this purpose South African (SA) companies in the chemical, food and electronic industries are to be evaluated on the hand of cash flow ratios and compared with companies in the USA in similar industries.

Design/methodology/approach

Giacomino and Mielke proposed nine cash flow ratios for performance evaluation. Ratios were calculated for companies in the USA in the chemical, food and electronic industries for 1986‐1988. Industry norms were calculated for the period, indicating that the potential existed to develop benchmarks for the ratios by industry. Jooste calculated cash flow ratios for listed companies in SA, similar to those calculated by Giacomino and Mielke. The results of the SA companies were then compared with the US companies.

Findings

The comparison revealed some similarities and differences. The cash flow sufficiency ratio showed that the SA industries had enough cash to pay primary obligations, whereas the US industries did not. At the levels of cash generated by SA industries the investments in assets and dividend payouts were more than for US industries. The cash flow generated by assets used in SA is also more than that of the USA but US industries retire long‐term debt in a shorter period than SA industries.

Research limitations/implications

The periods used in the comparison differ. Research using the same periods was not available. No information was available on the state of the economies in each country for those periods.

Practical implications

The work done by Giacomino and Mielke is to be recommended. Further studies on the utility of cash flow data would be necessary to develop a set of cash flow‐based ratios. Such ratios used in conjunction with traditional balance‐sheet and income statement ratios should lead to a better understanding of the financial strengths and weaknesses of a company.

Originality/value

By comparing industries of a developing country with those of a first‐world country one may have an indication of the performance of SA companies in a global market.

Details

Managerial Finance, vol. 32 no. 7
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here
Article
Publication date: 1 August 2006

Dimitrios V. Kousenidis

This paper reports an attempt to design a free cash flow version of the cash flow statement. In specific, the paper relates the comprehensive income concept to the…

Abstract

Purpose

This paper reports an attempt to design a free cash flow version of the cash flow statement. In specific, the paper relates the comprehensive income concept to the definition of free cash flows and shows how free cash flows and residual income can be calculated from the cash flow statement.

Design/methodology/approach

This paper exhibits how this different version of the cash flow statement can be reported by illustrating the differences with the form of the statement required by the regulatory accounting bodies.

Findings

This paper shows that the cash flows resulting from operating and investing activities are exactly equal to the cash flows received by debt and equity holders (financing activities) by using a simple definition of a company's free cash flow.

Practical implications

The method used requires a different version of a cash flow statement in which all financing related cash flows, such as interest expense is not included in the cash flow from operating activities. This version of the cash flow statement can be used in order to evaluate and appreciate financial policy formulation.

Originality/value

The paper provides to the shareholders and all the parties who are interested in firm and its operation (managers, lenders etc) with information about the company's ability to distribute dividends, to issue new debt and in general the company's ability to meet its obligations.

Details

Managerial Finance, vol. 32 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here
Article
Publication date: 1 April 2003

B.W. Steyn and W.D. Hamman

This article assesses the state of cash flow reporting by listed South African industrial companies in order to evaluate whether the users of financial statements can…

Abstract

This article assesses the state of cash flow reporting by listed South African industrial companies in order to evaluate whether the users of financial statements can accept them as being reliable and use them as a tool to compare the operating performance of various companies. As the cash flow statement has been in use since 1989, it was envisaged that compliance would be high. However, it was found that there are several companies that deviate from some of the requirements of AC 118 regarding cash flow statements.

Details

Meditari Accountancy Research, vol. 11 no. 1
Type: Research Article
ISSN: 1022-2529

Keywords

Content available
Article
Publication date: 30 November 2016

Sungmin Kim and Yongwon Jang

Firms can use dividends and/or share repurchases to distribute cash to shareholders. Jagannathan, Stephens, and Weisbach (2000) argue that managers tend to use dividends…

Open Access

Abstract

Firms can use dividends and/or share repurchases to distribute cash to shareholders. Jagannathan, Stephens, and Weisbach (2000) argue that managers tend to use dividends to pay out permanent cash flows and repurchases to pay out temporary cash flows. This paper examines Korean firms’ decisions on their choices between paying out cash flows in the form of dividends or share repurchases. We focus on the permanence of cash flows. To complete this analysis, we decompose cash flows into a transitory component and a permanent one of each firm, employing the approach of Beveridge and Nelson (1981). We find that higher permanent cash flows increase the probability of a dividend increase, while higher temporary cash flows increase the probability of repurchases. And Korean firms tend to choose both dividend change and repurchases when temporary cash flows increase, rather than to choose only repurchases without dividend change. These empirical results show that Korean firms take into consideration of permanence of cash flows in the choice of their payout methods.

Details

Journal of Derivatives and Quantitative Studies, vol. 24 no. 4
Type: Research Article
ISSN: 2713-6647

Keywords

To view the access options for this content please click here
Article
Publication date: 1 January 1977

Hussien H. Shehata

This paper aims to explore the applicability of Systems Dynamics Methodology (SDM) to the formulation of long‐range cash flow policies. It also explains how the…

Abstract

This paper aims to explore the applicability of Systems Dynamics Methodology (SDM) to the formulation of long‐range cash flow policies. It also explains how the information generated from the model aids in understanding the behaviour of cash flow through time and helps in determining cash deficits, excess cash, including timing, and the contruction of cash budgets under different cash control policies. After a brief introduction which explains the basic ideas behind SDM, the structure of the model is developed and described and the results of a hypothetical example analysed. This is followed by some comments on practical aspects of implementing the model in real life and its potential for cash flow planning and control.

Details

Management Decision, vol. 15 no. 1
Type: Research Article
ISSN: 0025-1747

To view the access options for this content please click here

Abstract

Details

Handbook of Transport Strategy, Policy and Institutions
Type: Book
ISBN: 978-0-0804-4115-3

Abstract

Details

Corporate Financial Distress
Type: Book
ISBN: 978-1-83982-981-9

To view the access options for this content please click here
Book part
Publication date: 3 August 2015

Peter J. Frischmann, Lela D. “Kitty” Pumphrey and Mukunthan Santhanakrishnan

This instructional tool enhances coverage of statement of cash flows topics in graduate or upper division undergraduate accounting and finance courses.

Abstract

Purpose

This instructional tool enhances coverage of statement of cash flows topics in graduate or upper division undergraduate accounting and finance courses.

Methodology/approach

We review one of the complexities of preparing the statement of cash flows. The exercise may include a discussion of the mechanics of preparation of the statement of cash flows using the indirect method. This discussion might include rationales behind operating section adjustments and highlight the pitfalls of using these adjustments without understanding their reasons. Preparation of a statement of cash flows may be followed by introducing the concept of nonarticulation and how it can cause the information presented in the statement to be misleading. To further understanding, the instructor may introduce the reconciliation worksheet provided. Finally, a current public company example, also provided, highlights the magnitude of nonarticulation in practice.

Findings/practical implications

Students learn the complexities related to the preparation of the statement of cash flows. They are introduced to the concept of nonarticulation using an example of public company financial statements. Student feedback suggests appreciation for developing a deeper understanding of the statement of cash flows, learning why they are unable to replicate disclosed operating cash flow from balance sheets of publicly traded companies.

Details

Advances in Accounting Education: Teaching and Curriculum Innovations
Type: Book
ISBN: 978-1-78441-646-1

Keywords

To view the access options for this content please click here
Article
Publication date: 31 August 2019

Emmanuel Dele Omopariola, Abimbola Windapo, David John Edwards and Wellington Didibhuku Thwala

This paper aims to evaluate Nigerian contractors’ perceptions regarding the effects of positive and negative cash flow during construction projects, with a view to…

Abstract

Purpose

This paper aims to evaluate Nigerian contractors’ perceptions regarding the effects of positive and negative cash flow during construction projects, with a view to establishing effective strategies for cash flow management.

Design/methodology/approach

A desktop-based literature review is used to develop a cross-sectional questionnaire survey which uses Likert items to elicit responses from construction professionals on: the reasons for cash flow problems; the impacts of negative and positive cash flow; and the potential solutions for improving cash flow on construction projects.

Findings

The study finds that delay in payments, difficulty in obtaining financial aid and inadequate budgetary control are the causes of cash flow problems during construction projects. Cumulatively, these issues result in project delays, reduced profit margins and in the worst scenarios, abandoned projects.

Originality/value

There has been limited research into the effects of positive and negative cash flows on construction projects in Nigeria and indeed, the wider geographical location of West Africa. This study addresses this observed dearth and consequently advances methods and solutions to deal with the problem of poor cash flow management in the Nigerian construction industry.

Details

Journal of Engineering, Design and Technology , vol. 18 no. 2
Type: Research Article
ISSN: 1726-0531

Keywords

1 – 10 of over 24000