Parthasarathi Shome; Christian Schutte
The cash-flow tax has been proposed as an alternative to corporate income tax on grounds of clarity and simplicity in defining the tax base in the face of widespread departures from the comprehensive income tax in actual practice. Variants of the tax, with their advantages and disadvantages, demonstrate that it would require careful design. Simplicity is not an obvious property because of expectable administration problems related to tax avoidance and evasion through transfer pricing; to infl...
Brown, Christopher; Loidl, Hans-Wolfgang; Berthold, Jost;
symbolic computation. In this paper we describe a new component of SymGrid-Par known as CASH: the C omputer Algebra SH ell. CASH is a system that allows direct access to SymGrid-Par via GHCi. CASH thus allows Haskell programmers to exploit high-performance parallel computations using a system designated...
Brown, Chris; Loidl, Hans-Wolfgang; Berthold, Jost;
This paper describes CASH (the Computer Algebra SHell), a new interface that allows Haskell programmers to access the complete functionality of a number of computer algebra systems directly and interactively. Using CASH, Haskell programmers can access previously-unavailable mathematical software....
This article investigates the use of cash flow-fundamental ratio in forecasting stock market return and examines implications behind this ratio. By presuming the dynamics of cash flow-fundamental ratio I identify the relationship between economic uncertainty and risk premium. The evidence shows that cash flow-fundamental ratio is procyclical and is a predictor of cash flow growth and excess returns. The cash flow-fundamental ratio is proved to be negatively associated with risk premium. I als...
Kum, Chi Leng
Cash flow forecasts are the most important step in the capital budgeting process in terms of planning effectively to finance for cash deficit and invest cash surplus for capital expenditure decisions. Despite its importance, little progress has been made in its estimation process, due to the difficulty of producing accurate cash flow numbers for the analysis of capital budgeting decisions. This management project details the investigation of the cash flow forecasts practices and highlights so...
Tănase Alin-Eliodor; Calota Traian-Ovidiu
The consolidated financial statements must includ a specific statement, regarding cash flows from all activities of the entity, called „consolidated statement of cash flow”. Information for preparing cash flow statements can be found in all other components of the financial statements, such as financial position, statement of comprehensive income and statement of changes in equity. The cash flow statement shall report cash flows during the period classified by operating, investing and financi...
Tamara Kucherenko; Inna Tkachuk
Cash is the only kind of company resource which can be transformed directly and with minimum time lag into any other kind of resources, their movement servicing all management operational processes. The article is covers the development of cash management algorithm in agricultural enterprise. The author has worked out the algorithm for determining the efficiency of cash management in agricultural enterprise. As the basis of the algorithm the income approach and discounted cash flow method has...
This paper shows that ten methods of company valuation using discounted cash flows (WACC; equity cash flow; capital cash flow; adjusted present value; residual income; EVA; business's risk-adjusted equity cash flow; business's risk-adjusted free cash flow; risk-free-adjusted equity cash flow; and risk-free-adjusted free cash flow) always give the same value when identical assumptions are used. This result is logical, since all the methods analyze the same reality using the same assumptions; t...
MELANIA ELENA MICULEAC
In order to reach the objective of supplying some relevant information regarding the liquidity inflows and outflows during a financial exercise, the total cash flow analysis must include the analysis of result cashable from operation, of payments and receipts related to the investment and of financing decisions of the last exercise, as well as the analysis of treasury variation (of cash items). The management of total cash flows ensures the correlation of current liquidness flows as consequen...
MELANIA ELENA MICULEAC
Full Text Available In order to reach the objective of supplying some relevant information regarding the liquidity inflows and outflows during a financial exercise, the total cash flow analysis must include the analysis of result cashable from operation, of payments and receipts related to the investment and of financing decisions of the last exercise, as well as the analysis of treasury variation (of cash items. The management of total cash flows ensures the correlation of current liquidness flows as consequence of receipts with the payments ’flows, in order to provide payment continuity of mature obligations.
This study examines cash flow forecasting practices in the context of the startup company phenomenon in Finland. The first objective of this study is to investigate that how cash flow forecasting has been practiced in startup companies. A startup company is a young innovative organization founded to seek a scalable and repeatable business model, in this sense growth has become the most important topic for startup companies. Therefore, secondary objective of this study is to investigate how a ...
Simões, Flavio Manuel Vilas-Boas
Research literature and regulators are unconditional in pointing the disclosure of operating cash flow through direct method a section of unique information. Besides the intuitive facet, it is also consistent in forecasting future operating cash flows and a cohesive piece to financial statement puzzle. Bearing this in mind, I produce an analysis on the usefulness and predictive ability on the disclosure of gross cash receipts and payments over the disclosure of reconciliation between net inco...
Gad, Kamille Sofie Tågholt; Nielsen, Jeppe Woetmann
guarantees provided. Stochastic retirement creates a need to rethink the construction of disability products for high ages and ways to handle this are discussed. We show how to calculate market reserves and how to use modified transition probabilities to calculate expected cash flows without significantly...
Odd A. Asbjørnsen
Full Text Available The net present value of a discounted cash flow is used to evaluate projects. It is shown that the LaPlace transform of the cash flow time function is particularly useful when the cash flow profiles may be approximately described by ordinary linear differential equations in time. However, real cash flows are stochastic variables due to the stochastic nature of the disturbances during production.
Odd A. Asbjørnsen
The net present value of a discounted cash flow is used to evaluate projects. It is shown that the LaPlace transform of the cash flow time function is particularly useful when the cash flow profiles may be approximately described by ordinary linear differential equations in time. However, real cash flows are stochastic variables due to the stochastic nature of the disturbances during production.
Negrea Laura Georgeta; Matis Dumitru; Mustata V. Razvan
The present study has as main objective to reflect the state of literature regarding free cash flow, and to withdraw the main pro's and con's in order to create an objective image upon this indicator. The main idea generating this research was the growing interest on cash flow reporting. As many say, "Cash Flow is King", while in Anglo Saxon countries the interest of investors and analysts in concentrated on operating cash flow, as the most important indicator of the probability of bankruptcy...
Barenbaum, L; Monahan, T F
Financial managers are discovering that net income and other traditional measures of cash flow may not provide them with the flexibility needed for comprehensive internal planning and control. By using a discretionary cash flow model, financial managers have a forecasting tool that can help them measure anticipated cash flows, and make better decisions concerning financing alternatives, capital expansion, and performance appraisal. PMID:10302282
Huang, Zhangkai; Mayer, Colin; Sussman, Oren
How do firms finance large cash flow requirements? We examine this in the context of firms that are subject to substantial cash flow requirements. We find that trade credit, inventory and cash stock reductions are all important in the short term for mild requirements. Larger and longer cash flow shortages give rise to more equity than debt finance. After the shocks, firms gradually adjust their leverage back to pre-shock levels by retiring debt and issuing equity. Financing pat...
Jeng-Ren Chiou; Yenn-Ru Chen; Ting-Chiao Huang
This study solves the dispute between the free cash flow and tunneling hypotheses in explaining the role of cash dividends on asset expropriation of the controlling shareholders in Chinese listed firms. Investors value more the cash dividends and the cash holdings of firms with lower ownership control than those of firms with higher ownership control. This is more consistent with the tunneling hypothesis. However, when investment opportunities are considered, the free cash flow hypothesis better explains firms’ dividend policy. Investors value more the cash dividends of firms with fewer investment opportunities and higher probability of expropriation. This study indicates that investors are concerned with the potential asset expropriation through cash payouts, unless firms possess high growth opportunities.
Mutti, Cristine do Nascimento; Hughes, Will
The level of insolvencies in the construction industry is high, when compared to other industry sectors. Given the management expertise and experience that is available to the construction industry, it seems strange that, according to the literature, the major causes of failure are lack of financial control and poor management. This indicates that with a good cash flow management, companies could be kept operating and financially healthy. It is possible to prevent failure. Although there ...
The purpose of this study was to develop a cash flow forecast model for the case company. The case company in this thesis was a Finnish building construction company. The group controlling set a target to improve the corporate treasury’s current long-term cash flow forecast because it was inaccurate and it often had outstanding deficiencies between actual and forecasted figures. A project team was set up to investigate on this issue and this research and development project is documented in t...
The thesis deals with the design and implementation of Business Intelligence solution for evaluation of cash flow in organization. In the theoretical part, author introduces the reader with theoretical knowledge of Business Intelligence, cash flow and analysis of enterprise information system Helios Green. In the practical part is description of the design and implementation of data warehouse and ana-lytic database. In the part of implementation is explained strategic planning of cash flow, e...
Harold Fletcher; Thomas Ulrich
This paper addresses one of the more difficult topics in teaching MBA level financial management, the statement of cash flows. By employing financial statement equations in preparing the statement of cash flows, students: (1) are employing tools that they are more familiar and comfortable with which mitigates their anxiety and enhances their understanding, (2) are better able to understand the logic of the statement of cash flows and the relationships that exist between it and the income stat...
Marco Aurelio Pacheco; Mara Noronha; Marley Vellasco; Carlos Lopes
This article describes an intelligent system for financial planning and cashflow optimization named ICF: Intelligent Cash Flow. ICF is a computational tool for decision support which provides short-term and long-term financial managing strategies, considering financial products of the market. The ICF system makes use of Genetic Algorithms to elaborate cash flow projections which improve the company's profit for a specific period. ICF helps to deal with the complex aspects of cash flow plannin...
Cash flow forecasting is an emerging cash management function and business tool that hasn’t received much scientific attention outside the finance and accounting field. Recent technological development of business process automation and networked services has enabled accounting companies to better service their clientele, focusing more towards value-added services. The purpose of this study is to examine the cash flow forecasting services offered by the accounting companies in the SME sect...
Analysis of financial balance through cash flows used to estimate future cash needs based on past situation, their knowledge would be useful to both shareholders interested in the existence of sufficient cash to pay dividends and creditors who are interested in recovering loans. Equally, knowledge of future cash flows of interest to potential investors updated cash flow method is a method of evaluation of the company.
Constantin ANGHELACHE; Radu Titus MARINESCU; Alexandru MANOLE; Mitrut, Constantin
This paper analyzes the cash flow, as integrated into the manufacturing process of an enterprise. Incomes and expenses are recorded based on the principles of engagement accounting, the actual cash flow in the company treasury is different from the result from the profit and loss account.
Negrea Laura Georgeta
Full Text Available The present study has as main objective to reflect the state of literature regarding free cash flow, and to withdraw the main pro's and con's in order to create an objective image upon this indicator. The main idea generating this research was the growing interest on cash flow reporting. As many say, 'Cash Flow is King', while in Anglo Saxon countries the interest of investors and analysts in concentrated on operating cash flow, as the most important indicator of the probability of bankruptcy. In this context, voluntary additional reporting, like free cash flow may come either as an aid in providing the fair view or as an opportunistically reported figure. Throughout the paper, the intention was to provide answers to three main research questions: What are the definition and calculation method of free cash flow? Why is there an interest in free cash flow reporting? What is the impact of free cash flow on the agency theory? In order to provide relevant conclusions, four international data basis were used, and related articles and studies were extracted. The results proved that there is no generally accepted definition and computing method, while the format depends on the end-user of the report (shareholders, investors, analysts, bankers, a.s.o.. As stated below, this aspect generates confusion and lack of comparability, giving room to creative accounting techniques. Moreover, the interest on free cash flow reporting is connected mainly to liquidity assessment, company valuation and investors choice. Still, in the context of agency theory, results show that in presence of high free cash flow, managers tend to make investment choices that satisfy their personal interest and that generate low efficiency and profitability for the company. The contribution to current state of research is providing a literature review study, focused on a comparative approach, as well as on underlying an objective image upon a debatable financial indicator and
This paper explores the discounted cash flow valuation methods. We start the paper with the simplest case: no-growth, perpetual-life companies. Then we will study the continuous growth case and, finally, the general case. The different concepts of cash flow used in company valuation are defined: equity cash flow (ECF), free cash flow (FCF), and capital cash flow (CCF). Then the appropriate discount rate is determined for each cash flow, depending on the valuation method used. Our starting poi...
... 48 Federal Acquisition Regulations System 3 2010-10-01 2010-10-01 false Cash flow forecasts. 232.072-3 Section 232.072-3 Federal Acquisition Regulations System DEFENSE ACQUISITION REGULATIONS SYSTEM... liquidation of loans; and (8) Estimated amount and timing of cash receipt from other sources. (f)...
Cash flow forecasting is very important for owners and contractors of nuclear power projects to arrange the capital and to decrease the capital cost. The factors related to contractor cash flow forecasting are analyzed and a cash flow forecasting model is presented which is suitable for both contractors and owners. The model is efficiently solved using a cost-schedule data integration scheme described. A program is developed based on the model and verified with real project data. The result indicates that the model is efficient and effective
Lourdes Jerez Barroso
Full Text Available Purpose: Due to its advantages in terms of neutrality and simplicity, the aim of this paper is to design a tax base for corporation cash flows, as well as to develop its practical implementation.Design/Methodology: The conceptual aspects and the background of tax on corporation tax flows are reviewed and a tax base that levies a charge on the corporation’s economical activities’ cash flow is then proposed. In order to carry this out, a methodological procedure is developed on the basis of the accounting documents that companies must present and through which the stock variables and the accounting documents’ work flow is transformed into cash flow.Findings: An implementation on the basis of the accounting documents that Spanish companies must present. Practical Implications: This paper defines the procedure to follow in order to determine the tax base of a cash flow corporate income tax on the basis of its accounts, which would allow an estimation of this tax figure’s revenue impact.Originality/ Value: The design of a tax base of cash flows for companies. The accounting approximation carried out to determine the cash flows justifies the fact that the tax base proposal is technically possible.
Pang, Yang; Opong, Kwaku; Moutinho, Luia; Li, Yun
This paper tackles the problem of financial forecasting by extending methods developed in automation, engineering and computing science. Current methods existing in the literature for firm-level cash flows are first analysed. Then a grey-box modelling method is developed to elevate the performance of cash-flow prediction. Linear panel data modelling is used as a benchmark model. Experiments with out-of-sample tests are used to validate the grey-box approach. Encouragingly, nonlinear grey-box ...
This paper closely examines theoretical and practical aspects of the widely used discounted cash flows (DCF) valuation method. It assesses its potentials as well as several weaknesses. A special emphasize is being put on the valuation of companies using the DCF method. The paper finds that the discounted cash flow method is a powerful tool to analyze even complex situations. However, the DCF method is subject to massive assumption bias and even slight changes in the underlying assumptions of ...
My dissertation explores the financial effects of firms' growing reliance on intangible capital in their production technology. I examine the fundamental link between the cash flow risk, financial decision-making and the accumulation of firm-level intangible capital both in theory and in empirics. In Chapter one, I document that public firms in the United States that provide better insurance against productivity shocks to their workers experience higher cash flow volatility. Difference in i...
Building on the work of Stulz (1990), this paper analyzes the impact of managerial discretion on optimal leverage within an agency cost model of corporate financing. Under the assumption that stockholders do not know with certainty the mean of the cash flow distribution, we argue that leverage fails to control for the amount of cash the manager can misappropriate in personal projects. We develop a model of a firm’s value maximization problem that predicts that as expected earnings uncertainty...
Lourdes Jerez Barroso; Joaquín Texeira Quirós
Purpose: Due to its advantages in terms of neutrality and simplicity, the aim of this paper is to design a tax base for corporation cash flows, as well as to develop its practical implementation.Design/Methodology: The conceptual aspects and the background of tax on corporation tax flows are reviewed and a tax base that levies a charge on the corporation’s economical activities’ cash flow is then proposed. In order to carry this out, a methodological procedure is developed on the basis of the...
Full Text Available This paper based on the perspective of firm’s agency conflicts to examine the relationship between financial reporting quality and investment efficiency and to analyze the interaction effect between financial reporting and free cash flow on investment efficiency. We use 3,726 samples of Chinese listed firms during the period 2008–2012 to test the empirical models and find that financial reporting quality is negatively associated with both underinvestment and overinvestment. Further, we find that financial reporting quality is more strongly associated with overinvestment for firms with large free cash flow, which suggests that financial reporting quality can reduce information asymmetry arising from agency conflicts between the managers and investors. This paper extends the field of application of financial reporting quality and investment efficiency in the emerging capital markets in the world. Moreover, this is the first study that analyzes the interaction effect between financial reporting quality and free cash flow on investment efficiency.
Lavinia Elena BRÎNDESCU OLARIU
Full Text Available The financing decision is taken based on the expectations concerning the future cash-flows generated in the operating activity, which should provide coverage for the debt service and allow for an increase of the shareholders’ wealth. Still, the future cash-flows are affected by risk, which makes the sensitivity analysis a very important part of the decision process. The current research sets to evaluate the sensitivity of the payment capacity to variations of the payments for raw materials and consumables. The study employs 391 forecasted yearly cash-flow statements collected from 50 companies together with detailed information concerning the hypotheses of the forecasts. The results of the study allow for the establishment of benchmarks for the payment capacity’s sensitivity, the determination of the mechanisms through which the variation of payments for raw materials and consumables impacts the payment capacity, as well as the identification of the possible causes of such a variation.
Lari Dashtbayaz, Mahmoud
The aim of this study is to examine why firms may manipulate not just their earnings but also their cash flows, and to investigate the effects of this behaviour in debt markets with respect to the cost of debt. This research addresses current concerns about accounting rules (both GAAP and IFRS) which allow companies discretion in the presentation of their operating cash flow in financial statements. Using a sample of 8,684 UK and 23,935 USA firm-years from 1998 to 2010, the reported operating...
Yu-Je Lee; Jie He; Mei-Fen Wu; Ying-Qing Li; Ching-Ho Chen
The preparation of cash-flow statement under the indirect method involves adjustments of many items. This is a highly complex process prone to errors, due to a lack of philosophical guidance. This paper finds that the concept of natural equilibrium of Chinese Taoism “… is the way of heaven to take from what has in excess in order to make good what is deficient...” can lend intellectual support to the preparation of cash flows statement under the indirect method. This approach will greatly enh...
Cash Flow-at-Risk (CFaR) is a risk measure that conveys information on the shortfall in cash flow, associated with a certain probability, a firm could experience over a certain time period. However, to provide information on outcomes that are identified as costly by the risk management literature, in particular underinvestment due to financing constraints, a risk measure needs to make explicit reference to the firm’s presumed access to external sources of funding. What is called for is thus a...
Arthur E. Young
Full Text Available There has been extensive research involving the utilization of free cash flow within an agency theory framework. This study investigates the relationship between minority interests and free cash flow on a sample of 37 firms using time-series analysis. In particular, we improve on previous studies by bringing in a time-series approach. Our data ranges from 1991 to 2008. We additionally study these relationships using the averages on both variables. Using a bivariate vector autoregressive (VAR model that captures dynamic relationships, we find that a minority interest positively affects free cash flow, whereas the opposite relationship is less evident. This is also backed by Granger causality tests. By means of impulse responses, we find that a once and for all standard deviation increase to a minority interest causes a statistically significant positive reaction on free cash flow, by the second year. Findings from the times-series analysis are consistent with previous literature stating that investors can benefit from the minority interests’ monitoring of the resources available for utilization at the managers’ discretion.
To minimize financial risk and accelerate return on investment, oil companies are using low-cost, reusable production systems. The scope of these development options is illustrated by looking at three offshore case studies that range from extended well test to marginal field development. In each case, production systems technology has been deployed to provide superior data, early oil or both, thus reducing economic uncertainty and delivering accelerated cash flow. 10 figs., 23 refs
I model the joint effects of debt, macroeconomic conditions, and cash flow cyclicality on risk-shifting behavior and managerial pay-for-performance sensitivity. I show that risk-shifting incentives rise during recessions and that the shareholders can eliminate such adverse incentives by reducing the equity-based compensation in managerial contracts. I also show that this reduction should be larger in highly procyclical firms. Using a sample of U.S. public firms, I provide evidence supportive ...
Business valuation becomes requisite not only because of the recent trend of mergers and acquisitions but of course regarding to identification of economic value creation sources. This paper examines weighted average cost of capital and terminal growth rate as the key input factors that is needed for discounted cash flow valuation and can alter the valuation results considerably. A practical example of this implication is given using sensitivity analysis. A special emphasize is being put on t...
Alan V. Douglas
The work in this paper contributes to two of the most topical issues in the study of corporate financial policy: Free Cash Flow theory and the Dividend providing a new explanation for the dividend puzzle. It is argued that two types of asymmetric information problems are inherent in the relationship between shareholders (as principles) and managers (as the shareholders' agents), and therefore the payment scheme between them will be designed to mitigate these problems. The conflict of interest...
Full Text Available Finding appropriate ways to use cash flows to achieve financial diagnosis is one of the hardest tasks for financial analysts. Literature stressed the advantages for financial diagnosis users, when using flow information, without offering as many practical waysto achieve it. In a market economy, the enterprise should be regarded as a system that runs through its relations with third parties (investors, creditors, budgeting, suppliers,etc... relationships which materialize through estate flows. According as these flowstake liquidity shape are interested both third parties (for reclaiming of amounts invested and gaining benefits or claiming of some claims, as well as the management unit, for only thus can the system work.
irr calculates the (periodic) internal rate of return for a series of periodic cash flows. These cash flows do not have to be constant, however, the cash flows must occur at regular intervals, such as months or years (if the cash flow payments are monthly, then the resulting rate of return is multiplied by 12 for the annual rate of return).
Wen-Hua Cui; Jie-Sheng Wang; Chen-Xu Ning
In order to improve the accuracy of all kinds of information in the cash business and enhance the linkage between cash inventory forecasting and cash management information in the commercial bank, the first moving average prediction method, the second moving average prediction method, the first exponential smoothing prediction and the second exponential smoothing prediction methods are adopted to realize the time series prediction of bank cash flow, respectively. The prediction accuracy of th...
SILVIU EDUARD DINCA
Full Text Available During the past few years, in the recent post-crisis aftermath, global asset managers are constantly searching new ways to optimize their investment portfolios while financial and banking institutions around the world are exploring new alternatives to better secure their financing and refinancing demands altogether with the enhancement of their risk management capabilities. We will exhibit herewith a comparison between the cash-flow and market-value CDO securitizations as financial markets-based funding, investment and risks mitigation techniques, highlighting certain key structuring and implementation specifics on each of them.
The design and implementation of any portfolio management programme must, by definition, be tailored to the drivers and particular objectives of the company owning the assets. This paper will concentrate on one of the most important driving forces, namely managing cash-flow. Five key steps are required to achieve an effective portfolio management programme: 1. establish targets/goals; 2. describe and value the assets in your company's portfolio; 3. identify and catalogue potential 'customers'; 4. construct appropriate deal structures and other strategies to achieve your targets; 5. work hard and do deals. (author)
Jennergren, L. Peter
All steps of the discounted cash flow model are outlined. Essential steps are: calculation of free cash flow, forecasting of future accounting data (income statements and balance sheets), and discounting of free cash flow. There is particular emphasis on forecasting those balance sheet items which relate to Property, Plant, and Equipment. There is an exemplifying valuation included (of a company called McKay), as an illustration. A number of other valuation models (abnormal earnings, adjusted...
Full Text Available Purpose: With the introduction of the cash flow statement it became an integral part of financial reporting. A need arose to develop ratios for the effective evaluation of cash flow information. This article investigates cash flow ratios suggested by various researchers and suggests a list of ratios with the potential to predict financial failure. Design: The cash flow ratios suggested by researchers, from as early as 1966, are investigated and eight cash flow ratios selected for inclusion in an analysis to predict financial failure. Ten failed entities are selected for a cash flow evaluation by means of the selected ratios for five years prior to failure. For a comparison, non-failed entities in similar sectors are selected and also evaluated by means of the cash flow ratios. The mean values of each ratio, for each year prior to failure, were then calculated and the means of the failed entities were compared to the non-failed entities. Findings: The comparison revealed that cash flow ratios have predictive value with the cash flow to total debt identified as the best indicator of failure. It was also determined that, although failed entities have lower cash flows than non-failed entities, they also had smaller reserves of liquid assets. Furthermore, they have less capacity to meet debt obligations and they tend to incur more debt. The ratios of the failed entities were unstable and fluctuated from one year to the next. Finally, bankruptcy could be predicted three years prior to financial failure. Implications: Income statement and balance sheet ratios are not enough to measure liquidity. An entity can have positive liquidity ratios and increasing profits, yet have serious cash flow problems. Ratios developed from the cash flow statement should supplement traditional accrual-based ratios to provide additional information on the financial strengths and weaknesses of an entity .
The internal rate of return (IRR) is a venerable technique for evaluating deterministic cash flow streams. Part of the difficulty in extending this measure to stochastic cash flows is the lack of coherent methods for accounting for multiple or nonexistent internal rates of return in deterministic streams. Recently such a coherent theory has been developed, and we examine its implications for stochastic cash flows. We devise an extension of the deterministic IRR, which we call the stochastic r...
Statement of cash flows presents useful information about changing the company's financial position, allowing to assess the enterprise’s ability to generate future cash flows and cash equivalents in the operating, investing and financing activities and their appropriate use. Treasury of an economic entity can be considered its strong point. The manner in which they manage money and financial flows, the final outcome will depend on the respective entity. Treasury is also an essential and main ...
ABSTRACT: The present study investigates the long run equilibrium relationship between cash flow and capital expenditure in German automobile sector as one of the leaders of the automobile industry in the world. Johansen co-integration test confirmed the relationship between cash flow and capital expenditure in the long run. Cash flow has significant and inelastic impact on capital expenditure (-0.963). Error correction model reveals that capital expenditure in German automobile sector conver...
Full Text Available This paper examines empirically the effect of firm growth opportunities and earnings quality on the market valuation of free cash flow, defined as the difference between operating cash flows and capital expenditures. Equity valuation theory prescribes that free cash flow should not be associated with stock returns because itdoes not add value. However, free cash flow could become a value-relevant construct in certain contexts. This study considers growth opportunities and transitory earnings as two such contexts and examines the valuation of free cash flow. An accounting-based valuation framework is developed where stock returns are regressed onfree cash flow interacted with growth and earnings quality proxies, after controlling for book values, dividends, and current earnings realisations. Findings reveal that firms with a positive free cash flow and attractive growth opportunities command a valuation premium. Furthermore, free cash flow is found to be positively associatedwith stock returns when earnings are transitory. The results are robust to alternative definitions of both free cash flow and growth opportunities.
Full Text Available The goal of this paper is to present some of the work conducted in order to create a cash-flow DSS that aims to improve the financial decisions of Romanian small and medium enterprise managers. In order to create the desired DSS two major stages were followed: the construction of models for various financial decisions and the implementation of those models within the knowledge base of the DSS. The present paper covers the first stage while the second stage will be presented in the next article. For a better understanding, the paper is divided into three parts: theoretical considerations, practical application of theory and conclusions. The theoretical part builds up on basic definitions and previous decision theory research, and, taking into consideration different modeling methodologies, establishes the necessary steps and tools that will be used in the second part. The second part establishes the decisional situations that will be modeled, briefly describes each of them and shows the models devised according to particularities of small and medium enterprises. The goal of this part is to create a model (variables, relations between them, etc that is suited for implementation in a cash-flow DSS. In the final part some conclusions are stated and the future research direction is established.
Aim of this bachelor work is Management of cash-flow in multinational corporation. Goal of this work is measuring and analyzing management of liquidity and cash-flow in L'Oreal ČR. Paper is aimed on indicators of liquidity and report of cash-flow. From this indicators and report is made conclusion on a financial state of company. The end of paper is dealing with management of financial finds. It collates management of financial funds by theoretical model and by cash-pooling
Full Text Available In order to improve the accuracy of all kinds of information in the cash business and enhance the linkage between cash inventory forecasting and cash management information in the commercial bank, the first moving average prediction method, the second moving average prediction method, the first exponential smoothing prediction and the second exponential smoothing prediction methods are adopted to realize the time series prediction of bank cash flow, respectively. The prediction accuracy of the cash flow time series is improved by optimizing the algorithm parameters. The simulation experiments are carried out on the reality commercial bank’s cash flow data and the predictive performance comparison results show the effectiveness of the proposed methods.
Carlo Alberto Magni
The recent notion of Average Internal Rate of Return (AIRR) [Magni 2010, The Engineering Economist, 55(2), 150-180] completely solves the long-standing problem of the internal rate of return (IRR). While the AIRR is a return measure, this paper presents a cash-flow measure, namely the ratio of net cash flow (i.e., cash inflows minus cash outflows) to capital invested. It is a purely internal measure because, unlike the AIRR, it does not depend on the market rate, and is a return measure as we...
The article is devoted topical questions of organization of accounting and internal check cash flow and payment on base business of automobile maintenance servicing. Defined the problem of accounting and control cash flows are formulated proposals to address them.
Zulauf, Carl R.; Larson, Donald W.; Alexander, Christopher K.; Irwin, Scott H.
This paper contributes to the debate on whether pre-harvest pricing strategies can improve returns over cash sales at harvest. It also examines cash flow needs of such strategies. The analysis is conducted for Ohio corn produced from 1986 through 1999. The pre-harvest strategies evaluated (short futures, long put, synthetic long put, put-call fence) did not statistically improve returns over cash sales at harvest. However, if implemented during or before planting, these naïve strategies reduc...
Curry, John R.; Hutton, Lyn
Managing liquidity--a college or university's ability to access cash quickly or to easily convert assets to cash--is an increasingly crucial component of enterprise risk management. Liquidity risks lurk around nearly every corner--in the endowment portfolio, the debt portfolio, and in working-capital management. It also influences students'…
Wang, Ting J.
This paper describes the fundamental concept of the reconciliation behind the indirect method of the statement of cash flows. A conceptual framework is presented to demonstrate how accrual and cash-basis accounting methods relate to each other and to illustrate the concept of reconciling these two accounting methods. The conceptual framework…
LUCIAN IOAN SABĂU
Full Text Available Following the proposals about the new IFRS that would replace the existing standards on financial statement presentation in IFRSs, IAS 1 Presentation of Financial Statements and IAS 7 Statement of Cash Flows, we conduct an empirical study on the opinions regarding the format of the cash flow statement, and the most appropriate method of presentation. The objective of this research is to develop a critical analysis based on this literature, regarding the most appropriate method of presenting cash flow statements. The results of our research is that the direct method is the most adequate for statement of cash flows, being confirmed by most studies reviewed, most researchers considering this method of reporting as the most appropriate and useful, compared with reporting by using the indirect method.
Ezzeddine Ben Mohamed
Full Text Available Investment cash flow sensitivity constitutes one important block of the corporate financial literature. While it is well documented in standard corporate finance, it is still young under behavioral corporate finance. In this paper, we test the investment cash flow sensitivity among panel data of American industrial firms during 1999-2010. Using Q-model of investment (Tobin, 1969, we construct and introduce a proxy of managerial optimism following Malmendier and Tate (2005a to show the impact of CEOs’ optimism in the relationship between investment and internal cash flow. Our results report a positive and significant coefficient of investment to cash flow for the full sample. While, on estimations of our model using sub-sample of more and less constrained firms, we find that the sensitivity exists stronger only for totally constrained group. We find also that board characteristics can reduce investment policy’s distortions.
Becker, Gernot M.; Seeger, Norbert
Cash flow statements have gained popularity worldwide and are now mandatory also under German GAAP for listed companies. Based on International Accounting Standard No. 7 we review their analytical value from both a shareholders and a creditors point of view. Cash flow patterns do vary from earnings patterns. Income earned is not identical with cash received. Enron and some other spectacular insolvency cases are just examples of this. In the first part of this working paper we present the co...
R. G. Kaspina; L. A. Molotov; L. E. Kaspin
The article is devoted to the practical aspects of integrated reporting cash flow forecasts. The proposed formationmethod is based on the fuzzy logics and the procedure of expert evaluations.As the result of a premade theoretical analysis of integrated reporting, an algorithm for cash flow forecasting hasbeen developed. Additionally, an example of practical application of the covered method based on integratedreporting data of JSC Nizhnekamskneftekhim has been included.
BACKGROUND AND MOTIVATION A new EU's accounting directive (2013/34/EU) focuses on the reliefs for financial statement disclosures of SMEs. Although directive 2013/34/EU is not taking a stand on cash flow preparation, in Finland a working group set by the Ministry of employment and economy has proposed that only large companies would be obliged to prepare cash flow statement as a part of financial statement. The Finnish parliament accepted the proposal in the part of renewed accounting law...
Objectives of the thesis: The objective of this thesis is to discover whether Otavamedia, a Finnish media company, can utilize its' publicly listed competitors' shares as a tool of risk management for its media sales cash flow. The risk associated with media sales cash flow is the inevitable effect it has on shareholders' funds available for distribution. The advantage the company has is the advance knowledge of media advertising growth, which is generally found to be vastly cyclical and ...
The purpose of the paper is to incorporate probabilistic business failure predictions in discounted cash flow (DCF) models for the valuation of company bonds and owners´ equity. The analysis shows that period-specific probabilities of business failure are instrumental to the assessment of expected values of cash flows in such models. Under somewhat restrictive conditions the failure risk can alternatively be accommodated through an adjustment of the discount rate, i.e. expected values of futu...
Fabio Bertoni; Massimo G. Colombo; Annalisa Croce
The impact of venture capital financing on the investment cash flow sensitivity - In this paper we study the effect of venture capital (VC) financing on firms’ investments in a longitudinal sample of 374 Italian unlisted new-technology-based firms (NTBFs) observed over the 10-year period from 1994 to 2003. In particular, we consider the influence of VC on both firms’ investment levels and the sensitivity of investments to firms’ cash flows. We also distinguish the effects of VC financing acc...
A computer code is presented which uses a discountted cash flow methodology to obtain an average product price for an industtrial process. The general discounted cash flow method is discussed. Special code options include multiple treatments of interest during construction and other preoperational costs, investment tax credits, and different methods for tax depreciation of capital assets. Two options for allocating the cost of plant decommissioning are available. The FORTRAN code listing and the computer output for a sample problem are included
Željana Aljinović Barać
Full Text Available This paper focuses on the voluntary disclosure of cash flows information of Croatian large companies whose shares are listed on the Zagreb Stock Exchange, with the aim to identify characteristics of companies that provide extensive disclosures. In order to conduct the research and test the likelihood that company publicly announces wealth of information about cash flows, three groups of company’s features are defined as variables: accounting data, capital market information and company’s qualitative characteristics. Verification of empirical evidence was provided through the sample of Croatian listed companies using logistic regression analysis. Obtained results indicate that despite the desire of the regulatory authorities that capital market investors receive all relevant information, companies voluntarily disclose information about cash flows very rarely. Those companies are young (i.e. their shares are listed on an organized securities market for a short time and profitable, with growing net income and growing cash flow from operating activities and usually use indirect method for operating cash flow report. The provision of features of Croatian companies that voluntary disclose cash flow information can be found as contribution of our research, because this topic in a cases of macro-oriented accounting system economies, i.e. bank oriented economies with emerging capital market is still unexplored.
Full Text Available Statement of cash flows presents useful information about changing the company's financial position, allowing to assess the enterprise’s ability to generate future cash flows and cash equivalents in the operating, investing and financing activities and their appropriate use. Treasury of an economic entity can be considered its strong point. The manner in which they manage money and financial flows, the final outcome will depend on the respective entity. Treasury is also an essential and main restriction of the financial management of the enterprise. Treasury embodies the results of operations and how to achieve financial balance of compliance. Not always an entity that ends year with benefits, has a positive cash (cash at bank and in availability. And this, because the gap between the recording and accounting of revenue and expenditure receipts and payments as they fall due, that gap can be decisive for the fate of the enterprise. This is a major requirement of the accrual. Therefore, an efficient management of the economic entity comprises both the asset management flows (revenues / expenses and cash management, i.e. the flows of receipts and payments. The statistical evidence shows that most of the failures are due to weaknesses in treasury management.
Miranda-Lopez, Jose Eduardo; Nichols, Linda M.
The concepts of both accrual accounting and cash basis accounting need to be thoroughly understood by accounting graduates as they enter the workplace. In making decisions, both managers and investors often may need to make adjustments from one basis to the other. But do students really understand these concepts? This study uses an experimental…
Takiah Mohd Iskandar; Rina Br Bukit; Zuraidah Mohd Sanusi
Based on agency theory, ownership structure plays a role in monitoring managerial opportunistic behaviour. This study examines how different forms of ownership structures including foreign ownership, government ownership, and managerial ownership moderate the relationship between free cash flow and asset utilisation. This cross-sectional study involves companies listed on Bursa Malaysia. The results of a hierarchical multiple regression analysis show a negative relationship between free cash ...
This paper introduces a cash flow model to budget and monitor distinctive matters usually arising in corporate governance. By enlarging the standard cash flow model widely used in Finance, and avoiding some of its downsides, it sets up a composite of cash flows called governance slack, which amounts to a comprehensive budget for the most usual governance issues. This slack has a dual structure whose dynamics keeps track of uses and sources of its components, preventing likely agency problems ...
Mohammad Hassani; Mehri Misaghi
Capital employed efficiency is one of the intellectual capital components based on value added intellectual capital model. It is calculated by dividing value added on capital employed. Operational cash flow is made from operating activities. It is expected that created value added from capital employed could make more operational cash flow. This paper investigates the relationship between capital employed efficiency and operating cash flow. To test this hypothesis, data has been collected fro...
R. Anastasia Endang Susilawati
Full Text Available The main objective of this research is to examine behavior public company in Indonesia to manage of free cash flows and the role namagerial ownership on corporate debt policy. The using dependent variable on this research is debt, so independent variables are free cash flows and managerial ownership. The sample used was the public companies listed in the Jakarta Stock Exchange (JSX. There were 59 companies which have and during the period from 2005-2009. Data collected by purposive sampling. The result examination is that public company in Indonesia have low investment opportunity set (IOS when free cash flow high attending by using debt for cost operation company. This result robust because evidence with chow test the result that significant difference regression stability between free cash flow to corporate debt policy have low and high investment opportunity set. Although, when dividend based big company have low investment opportunity and small company have low investment opportunity, both have the same effect between free cash flow on corporate debt policy. The result chow test suggest examination there are not statistically significant difference. Managerial ownership association negative with debt policy, this result evidence that agency cost of debt can be reduce by managerial ownership
Valentina Dorina BOGDAN
Full Text Available The purpose of this thesis is to understand the logic of the approach based on income and the methods included in this approach. Reading through this paper must provide us with the ability to choose and correctly apply the methods presented in order to estimate the enterprise value. Understanding the method cash - flow update – is conditioned by the differentiation between collection and income, fees and expenses. The profit is the result of comparing revenues and expenses. Not all revenue generate collection at the same time; not all expenses generate payments. Their registration into accounting is delayed. Cash-flow is the evolution of the availability of funds in itself of the company, the evolution of the net treasury. In summary, we note that approach based on income estimates an enterprise value by converting future streams of income in the present value of an enterprise which can generate those cash flows.
annual reports from 385 Danish non-listed medium-sized companies who were disclosing a cash flow statement as part of their annual report, we found that in a few cases, the companies were exempted to presentation of consolidated financial statements, but disclosing the cash flow statement voluntarily...... reason we conducted a multiple-case study, where we formulated a structured questionnaire and made partly open-ended interview with each one of the case-companies’ accountably responsible persons, i.e. one of the guys who signed the annual report. Among the majority of the answers we found a common......In Denmark, like some other EU Member States, medium-sized companies are requested to present a cash flow statement, but there are exemption rules similar to those for subgroups’ exemption to their presentation of consolidated financial statements. In a sample consisting of the paper versions of...
Full Text Available The aim of this research is to provide empirical evidence on the impact of good corporate governance, free cash flow, and leverage ratio on earnings management. Good corporate governance is measured by audit committee’s size, the proportion of independent commissioners, institutional ownership, and managerial ownership. Discretionary accrual is the proxy of earning management. This research used 14 textile companies listed in Indonesia Stock Exchange, selected using purposive sampling method, during the research period 2007-2011. Data were analyzed using multiple regression method. Based on the result of analysis concluded that all components of good corporate governance (audit committee’s size, the proportion of independent commissioners, institutional ownership, and managerial ownership, have no significant effect on earnings management, while leverage ratio has a significant effect on earnings management, and free cash flow has a negative and significant effect on earnings management. It means that companies with high free cash flow will restrict the practice of earnings management.
Fernando Gómez Villarraga
Full Text Available The mathematic scheme, known as economic equation of continuity, is established for the balance of economic resources. In order to apply this equation it is necessary to determine an economic volume of control. The patrimonial equation is also proposed as a speed equationfor this volurne. The integral equation of economic continuity is applied to the «cash» system along with the integral patrimonial equation and so it gets expressions that correspond to model to elaborate cashflow statement with the particularities of the direct and indirect method. This model generales a useful definition for the calculation of this basic financial statement classified by operating, investing and financing activities.
Full Text Available Penelitian ini bertujuan menguji bagaimana free cash flow dan struktur kepemilikan berpengaruh terhadap dividend payout ratio pada perusahaan nonkeuangan yang terdaftar pada Bursa Efek Indonesia. Metode analisis yang digunakan adalah regresi berganda. Penelitian ini menggunakan data empiris dari Bursa Efek Indonesia dengan sampel sebanyak 70 perusahaan per tahun untuk tiga periode (2007-2009. Berdasarkan hasil pengujian, ditemukan bahwa variabel yang mempunyai pengaruh yang signifikan terhadap pembagian dividen adalah free cash flow, kepemilikan institusional, dan ukuran perusahaan. Jumlah free cash flow perusahaan yang tinggi, persentase kepemilikan institusional yang rendah, dan ukuran perusahaan yang besar akan menghasilkan dividend payout ratio yang tinggi. Variabel kepemilikan keluarga, kepemilikan asing, kebijakan utang, dan kesempatan investasi tidak terbukti mempunyai pengaruh yang signifikan terhadap Dividend Payout Ratio perusahaan.This study aims at testing the effect of free cash flow and ownership structure on the dividend payout ratio of non-financial companies, listed on the Indonesia Stock Exchange. Multiple regression was employed to analyze data. The study collected empirical data from the Indonesia Stock Exchange consisting of 70 companies. The data were collected from financial report from three consecutive years (2007-2009. The finding indicates that the variables which have a significant effect on the dividend payout ratio are free cash flow, institutional ownership, and firm size. The high free cash flow,Â the low percentage of institutional ownership, and the large size companies will produce high dividends. The variable of family ownership, foreign ownership, debt policy, and investment opportunities do not significantly effect corporate dividend payout ratio.
Keimig, M.A.; Rosenberg, J.I.; Entingh, D.J.
This is the users guide for the Geothermal Loan Guaranty Cash Flow Model (GCFM). GCFM is a Fortran code which designs and costs geothermal fields and electric power plants. It contains a financial analysis module which performs life cycle costing analysis taking into account various types of taxes, costs and financial structures. The financial module includes a discounted cash flow feature which calculates a levelized breakeven price for each run. The user's guide contains descriptions of the data requirements and instructions for using the model.
This study looks at the profitability through cash flow analysis of long-term real estate investment from the private investor’s perspective. The focus of the project is on annual cash flow and refurbishment costs during a 20-year outlook period. The scope of the project is defined together with the commissioning private investor who has invested in apartments since 2011 and wants to discover whether the time, effort, and money used in the investments have been worthwhile and if the outlook o...
Public firms in the United States that provide better insurance against productivity shocks to their workers experience higher cash flow volatility. Difference in intra-firm risk sharing between workers and capital owners accounts for more than 50\\% of the variation in firm-level cash flow volatility. I develop a theory in which wages can act either as a hedge or as leverage, depending on the history of the productivity shocks the firm has faced. Heterogeneous roles of workers in the firm are...
The paper addresses the assessment of major U.S. airlinesâ€(tm) liquidity and solvency based on information disclosed in the statements of cash flows as part of their 10-K Form annual reports filed with the Securities and Exchange Commission. Conducting financial statement analysis for major U.S. airlines has generated deep interest in and a significant importance towards using various frequently used cash flow ratios to gauge U.S. airlinesâ€(tm) viability both in the short term and long term...
Diana Elena Vasiu
Full Text Available Europe 2020, a strategy for smart, sustainable and inclusive growth stresses the necessity of smart, sustainable and inclusive growth. The objectives of a sustainable economic development include sustaining economic growth, maximizing private profits and expanding markets. Considering this, economic development must based on facts, not on papers. Therefore, considering the economic dimension of sustainable development, it is important to establish if Romanian companies listed and traded on Bucharest Stock Exchange are able to obtain profit while cash is withdrawn. Even if reported in the income statement, net profit is not simultaneously charged due to accrual accounting that makes the balance sheet provide a static picture of the financial position, while the cash flow statement provides a dynamic picture of it. Therefore, the financial performance analysis based on classical indicators of performance must be accompanied by the analysis of treasury, namely of the cash flow, which provides a comprehensive assessment possibility of the financial performance, flexibility and adaptability of the economic entity, in the context of a highly competitive and often unstable environment. A positive net flows is a confirmation of the economic success of the company representing the concrete expression of the net profit and other pecuniary accumulations, interpreted as the real self-financing investment capacity, which would lead to the real asset growth and thus to the increase of the owners' wealth.
Full Text Available In this paper deals with the cash flow analysis in agricultural companies in particular regions of the SlovakRepublic. At present, from a company’s point of view it is not so important to reach a profit but to have asufficient cash to keep solvency. On base of column and balance cash flow composition we determine in whichareas agricultural companies invested money and what sources they used to finance their activities.Agricultural companies in the Slovak Republic financed their activities particularly from internal sources,however, they used external sources, too. Companies situated in better natural conditions spent more externalsources than companies in LFA. The companies used the financial sources in operating and investment activitiesequally.
A. M. El-Kholy
Full Text Available Although significant research work has been conducted on cash flow forecast, planning, and management, the objective is constantly the maximization of profit/final cash balance, or minimization of total project cost. This paper presents a multi-objective fuzzy linear programming model (FLP for resolving the optimization problem of three conflicting objectives: final cash balance, cost of money, and initial cash balance. The proposed model depends on Jiang et al. (2011 Model. In the new formulation, both the advanced payment and delay of owner's progress payment one period were considered. Literature concerned with cash flow studies and models for construction projects was reviewed. Fuzzy linear programming applications in literature was presented and it's concept was then described. Jiang et al. (2011 Model is presented. The proposed model development was then presented. The proposed model was validated using an example project. An optimization of each individual objective was performed with a linear programming (LP software (Lindo that gave the upper and lower bounds for the multi-objective analysis. Fuzzy linear programming was then applied to optimize the solution. Four cases are considered: considering advanced payment and delay of owner's progress payment one period simultaneously, then separately, and neglecting advanced payment and delay of owner's progress payment. Penalty of delayed payment have been also considered. Analysis of the results revealed that the model is an effective decision making tool to be used by industry practitioners with reasonable accuracy.
Bollerslev, Tim; Xu, Lai; Zhou, Hao
We examine the joint predictability of return and cash flow within a present value framework, by imposing the implications from a long-run risk model that allow for both time-varying volatility and volatility uncertainty. We provide new evidence that the expected return variation and the variance...
This bachelor's thesis deals with analysis of the cash flow statement. The aim is to analyze the cash flow statement of Rybářství Velké Meziříčí, a. s. for the three past financial years and apply the investment evaluation methods to the specific investment of the company. Then the cash flow is used in certain indicators and business is evaluated by one of the methods using cash flow.
The subject pertains to the implementation of the full range of subsurface uncertainties in life cycle probabilistic forecasting and its extension to project cash flows using the methodology of probabilities. A new tool has been developed in the probabilistic application of Crystal-Ball which can model reservoir volumetrics, life cycle production forecasts and project cash flows in a single environment. The tool is modular such that the volumetrics and cash flow modules are optional. Production forecasts are often generated by applying a decline equation to single best estimate values of input parameters such as initial potential, decline rate, abandonment rate etc -or sometimes by results of reservoir simulation. This new tool provides a means of implementing the full range of uncertainties and interdependencies of the input parameters into the production forecasts by defining the input parameters as probability density functions, PDFs and performing several iterations to generate an expectation curve forecast. Abandonment rate is implemented in each iteration via a link to an OPEX model. The expectation curve forecast is input into a cash flow model to generate a probabilistic NPV. Base case and sensitivity runs from reservoir simulation can likewise form the basis for a probabilistic production forecast from which a probabilistic cash flow can be generated. A good illustration of the application of this tool is in the modelling of the production forecast for a well that encounters its target reservoirs in OUT/ODT situation and thus has significant uncertainties. The uncertainty in presence and size (if present) of gas cap and dependency between ultimate recovery and initial potential amongst other uncertainties can be easily implemented in the production forecast with this tool. From the expectation curve forecast, a probabilistic NPV can be easily generated. Possible applications of this tool include: i. estimation of range of actual recoverable volumes based
Full Text Available We examine the valuation performance of Discounted Free Cash Flow Model (DFCF at the Macedonian Stock Exchange (MSE in order to determine if this model offer significant level of accuracy and relevancy for stock values determination. We find that stock values calculated with DCF model are very close to average market prices which suggests that market prices oscillate near their fundamental values. We can conclude that DFCF models are useful tools for the companies’ enterprise values calculation on long term. The analysis of our results derived from stock valuation with DFCF model as well as comparison with average market stock prices suggest that discounted cash flow model is relatively reliable valuation tool that have to be used for stocks analyses at MSE.
Full Text Available Reverse charge is currently used as a measure against VAT carousel fraud. Its extension to all goods and services is discussed among the tax policy makers at the national and EU level. Opponents of general reverse-charge argue that this method of VAT collection would completely change the nature of the VAT system. One of the practical drawbacks of reverse charge is the negative impact on the cash flow of the public budgets. This article quantifies the average monthly financing available to the State thanks to delayed repayments of input tax to VAT payers under the normal VAT system. This amount equals to almost 53 billion CZK and represents the negative impact of the general reverse charge on the cash flow of the public budgets. A change in the deadline for remitting VAT or introducing VAT advances to be paid prior to the final tax payment would reduce the negative influence on public finances.
Simin Banifatemi Kashi; Mohsen Hamidian; Ali Baghani
This paper presents an empirical study to determine the effects of different factors including present profit, depreciation, working capital, operating cash flow and other accruals on future earnings stability. The study selects the information of 124 selected firms from Tehran Stock Exchange over the period 2006-2012. Using two regression analysis, the study has determined that as the fluctuation of profit increases, the profitability increases too. In addition, the study has concluded that ...
We examine the valuation performance of Discounted Free Cash Flow Model (DFCF) at the Macedonian Stock Exchange (MSE) in order to determine if this model offer significant level of accuracy and relevancy for stock values determination. We find that stock values calculated with DCF model are very close to average market prices which suggests that market prices oscillate near their fundamental values. We can conclude that DFCF models are useful tools for the companies’ enterprise values calcula...
There were two principle objectives in this thesis: a theoretical and a practical one. The theoretical aim was related to the comparison of two most-widely used business valuation methods, Discounted Cash Flow (DCF) and Economic Value Added (EVA). By comparing the two methods the author gave a recommendation which valuation approach would be more applicable in small entities and their appraisal processes. The practical objective referred to the actual valuation of the Client Company with the ...
Ali Atilla Perek; Seda Perek
Valuation plays a central role in the financing, investing and operating decisions of companies and many methods are employed to approximate the true value of a company. Although these techniques are based on similar theory, they may generate different results in application. This study incorporates an empirical approach to compare the outcomes of two different methods: residual income and discounted cash flow valuation models. The aim of this study is to test whether these methods result in ...
In the actual crisis context, investment project appraisals and capital budgeting, which involve assessing the financial feasibility of a project, should use Discounted Cash Flow (DCF) analysis. This paper tries to present good practice principles and rules in project appraisal and financial managers’ role in this field of interest. Professional accountants in business become responsible for preparing and reporting on financial. They should (a) apply high standards of DCF and Net Present Valu...
Wang, Huoxin; 王火欣
This thesis consists of two essays. The first essay examines the effect of share repurchase on the diversification discount of multi-segment firms. The second essay investigates how firms’ decisions of share repurchases are influenced by analysts’ cash flow forecasts (CFF). In the first essay, I investigate the relation between the market reaction to share repurchase announcements and multi-segment firms’ diversification discount. Prior studies have shown that information asymmetry causes...
This paper mainly tries to answer three questions by comparing the discounted cash flow model (DCF) and residual earning model (REM). Firstly, which model will perform better in the valuation of equity? Secondly, how about the robustness of the different model? That is, will they give the same result under different assumptions, such as growth rates, evaluation horizons? Thirdly, which model has better explainability on the share price of traded firms? The empirical research result indicates ...
Haibu, M.; Margraf, C.; Miranda, M. D. M.; Nielsen, J. P.
For as long as anyone remembers non-life insurance companies have used the so called chain ladder method to reserve for outstanding liabilities. When historical payments of claims are used as observations then chain ladder can be understood as estimating a multiplicative model. In most non-life insurance companies a mixture of paid data and expert knowledge, incurred data, is used as observations instead of just payments. This paper considers recent statistical cash flow models for asset-liab...
Most popular corporate finance textbooks and practitioners present the Weighted Average Cost of Capital WACC calculation as independent from the Free Cash Flow. It is a common use that practitioners calculate a WACC a priori and use it independently from the firm value (this is, from FCF). In this note we show that FCF affects WACC and that this interrelationship creates circularity, but we show how it can be solved in a very easy way. There are two appendixes: one explaining the circularity ...
Jurica Lucyanda; Lilyana -
Penelitian ini bertujuan menguji bagaimana free cash flow dan struktur kepemilikan berpengaruh terhadap dividend payout ratio pada perusahaan nonkeuangan yang terdaftar pada Bursa Efek Indonesia. Metode analisis yang digunakan adalah regresi berganda. Penelitian ini menggunakan data empiris dari Bursa Efek Indonesia dengan sampel sebanyak 70 perusahaan per tahun untuk tiga periode (2007-2009). Berdasarkan hasil pengujian, ditemukan bahwa variabel yang mempunyai pengaruh yang signifikan terhad...
The aim of this research is to provide empirical evidence on the impact of good corporate governance, free cash flow, and leverage ratio on earnings management. Good corporate governance is measured by audit committee’s size, the proportion of independent commissioners, institutional ownership, and managerial ownership. Discretionary accrual is the proxy of earning management. This research used 14 textile companies listed in Indonesia Stock Exchange, selected using purposive sampling method,...
Full Text Available Repurchase of shares by Indian firms are on the rise in recent years. What motivates Indian firms to repurchase their own shares? Signalling and free cash flow hypotheses are two competitive and popular explanations identified in empirical research in US and other countries. Do Indian firms buy back their shares to correct market misvaluations or to return excess funds? In the present paper an effort is made to decipher the motives behind repurchase decisions of Indian firms. Since there are positive returns only on announcement day and not in post-announcement days the signalling hypothesis cannot be an explanation for positive overall CAR in Indian announcements. The study hypothesizes that Indian firms use repurchases as a part of overall corporate restructuring mechanism of distributing excess funds and build promoters' stake holding. The evidence shows that low-q firms with higher free cash flow ratio earn higher abnormal returns than other firms. The cross-sectional analysis generates positive coefficient for low-q firms with higher cash flow and promoters' control.
Full Text Available The purpose of this article is to obtain feedback about the transition to IFRS standards and their implementation in the context of small and medium-sized enterprises in Romania in terms of the cashflow situation. Research methodology is based on a quantitative survey carried out in order to verify the importance and usefulness of perception on the cash-flow statement. The investigation based on testing four hypotheses has been carried out within the framework of small and medium-sized enterprises in Western Romania and the categories of respondents to the study were: upper management and accounting specialists. The results highlight the fact that there are differences between the categories of users of the cash-flow statements, fact highlighted and illustrated by our findings. The article ends with the conclusions of the authors regarding the importance and usefulness of the use and implementation of the cash-flow statement of the small and medium enterprises in Western Romania.
Ezzeddine Ben Mohamed
Full Text Available In this paper, we present a literature review and classification scheme for investment cash flow sensitivity under behavioral corporate finance (hereafter, BCF. The former consists of all published articles between 2000 and 2011 in different journals that are appropriate outlets for BCF research. The articles are classified and results of these are presented and analyzed. The classification of articles was based on nine criteria; journals, date of publication, paper nature, the context of the study adopted behavioral biases, adopted approach, behavioral biases measurement, the adopted assumption, econometric approach and empirical findings. Literature on investment cash flow sensitivity under behavioral corporate finance isn’t well developed. In fact, the behavioral corporate finance is very young. Our review shows that behavioral biases (optimism and overconfidence have an explanatory power and they can succeed to explain the dependence of corporate investment on the internal cash flow availability. This result is protected in the most cases by the some restrictive assumptions: the absence of agency costs and asymmetric information. Based on the review, suggestions for future research are likewise provided.
José Roberto Kassai
Full Text Available Starting on January 1, 2008 it became mandatory for all Brazilian public companies and private companies with net worth greater than two million reais (about one million dollars as of this writing to publish a cash flow statement (CFS as part of their financial statements, making this statement another important source of information for investors. This article proposes an algebraic generalization for the CFS. Working papers can help fill in a gap in teaching about cash flow statements and produce an indirect method and a direct method, side by side with their equivalence highlighted, in a single matrix by means of algebraic algorithms. This study is normative in nature and stresses the transversal relationship between accounting and mathematics, showing that accounting reports and their structures can be seen as matrices and be subjected to algebraic deductions about the events recorded by double entries. As a result, we demonstrate a mathematical algorithm with matrices and submatrices and a script in the format of working papers, compatible with the normative orientations of the Federal Accounting Council (CFS and Brazilian legislation, permitting formulation of clear, reliable and effective cash flow statements.
Full Text Available This research investigates whether Chinese cross-border investments have positive impact on shareholders wealth and whether the amount of bidders’ free cash flow influences the shareholder returns resulted from the acquisitions. The sample is based on 77 top Chinese cross-border investments during the years 2005-2009 with each deal value of minimum US$100 million. The assessments of acquisition abnormal returns are based on the event study methodology (Brown & Warner, 1985. Cross-sectional regression analysis is used to determine the bidding firms factors which significantly affect the returns. Factors are examined using OLS with White’s heteroscedasticity-corrected standard errors, since the assumption of homoscedasticity is likely to be violated. The study proves Chinese cross- border acquisitions result in positive abnormal returns which is consistent with synergy hypothesis. The amount of bidders’ free cash flow is also found to be marginally but positively associated with shareholders return which is consistent with Myers and Majluf’s pecking order hypothesis but unsupportive of Jensen’s free cash flow hypothesis.
分析了企业现金流管理的目标和原则,对企业经营活动产生的现金流、投资活动产生的现金流和筹资活动产生的现金流如何管理提出了建议。%The paper analyzed the target and principle of the cash flow management for the enterprise.The paper provided the proposals on how to manage the cash flow occurred from the enterprise business activities,the cash flow occurred from the investment activities and the cash flow occurred from the financing activities.
Pratt, William R
Hospitals are facing substantial financial and economic pressure as a result of health plan payment restructuring, unfunded mandates, and other factors. This article analyzes the relationship between free cash flow (FCF) and hospital efficiency given these financial challenges. Data from 270 California hospitals were used to estimate a stochastic frontier model of hospital cost efficiency that explicitly takes into account outpatient heterogeneity. The findings indicate that hospital FCF is significantly linked to firm efficiency/inefficiency. The results indicate that higher positive cash flows are related to lower cost inefficiency, but higher negative cash flows are related to higher cost inefficiency. Thus, cash flows not only impact the ability of hospitals to meet current liabilities, they are also related to the ability of the hospitals to use resources effectively. PMID:20973372
Financial theory argues that companies should manage cash flows and not accounting earnings when they hedge exchange rate exposures. Still, empirical evidence shows that a number of companies choose to manage accounting earnings. This empirical study of Danish, non-financial companies finds (1......) that when hedging the majority of companies expect to add value to their company by avoiding financial distress (reduce down side risk), (2) that when hedging managing cash flows versus managing accounting earnings as a first priority splits the companies in two, (3) a lack of difference (except for...... profitability) in company characteristics between the group of companies that manage cash flows versus the group of companies that manage accounting earnings as a first priority. The decision in real business on whether to manage cash flows or accounting earnings when hedging exchange rate exposures seems to be...
Hashem Valipour; Zakieh Shooshtarian; Esmail Ostovari
The main purpose of this research is to investigate the relationship between working capital, operating cash flow and operating income, in the companies that listed in Tehran Stock Exchange. Panel analysis is applied to sample of 52 companies during the period 2000-2009. The results show that there is a positive relationship between working capital and operating profit. But there is not meaningful relationship between operating cash flows and working capital.
Rapp, Marc Steffen
While some of the modern performance measures used in managerial accounting rely on cash flow based figures others try to take advantage of the information content of accounting figures. However, whether the additional information content in the accrual components of earnings improves the internal performance measurement is an open empirical question. To shed light on this question, I examine the correlation between operating cash flows and earnings with firm's total shareholder returns. Usin...
The purpose of this study is to examine the liquidity position of the Jordanian pharmaceutical sector using the traditional ratios as compared to the more recently developed cash flow ratios. The research involved the comparison between traditional ratios and cash flow ratios of the big seven companies of the pharmaceutical industry in Jordan over six years period (2007¨C2012). The companies were all from the same sector, and the data was obtained from the annual reports of these companies. T...
The Areva group reached a major milestone in 2013 in turning performance around by meeting a key objective of its Action 2016 plan: the return to breakeven of free operating cash flow. For the first time since 2005, cash generated by the Group's operations allowed it to fully fund strategic capital expenditures essential to the group's profitable growth. To achieve this result, Areva built on robust growth in nuclear operations, on contributions from its cost reduction plan and on strict management of capital spending. However, two projects launched in the previous decade (OL3 and a power plant modernization) and the Renewable Energies business impacted negatively the group's 2013 net income. On the Renewable Energies market, in a situation marked by a reduction of capital spending by customers, AREVA anticipated the consolidation required in the sector by implementing industrial partnerships such as the joint venture project with Gamesa, which aims to create a European champion in offshore wind. Similar initiatives were undertaken in solar energy and energy storage. The Group continues to implement the Action 2016 plan to pursue its recovery. While the economic environment remains uncertain and projects launched in the previous decade remain a burden, the Group forecasts further performance improvement and significant growth in cash flow generation by the end of the plan
Full Text Available The present research intends to provide different information about cash flows management, any effectivefactors and also the effect of capital structure type on it. It is really important to consider cash situation ofcompany and especially the correctness and true information of operational cash flows. This is because anypersons who may benefit from mentioned information would be enabled to apply mentioned information forestimation of time, quantity and ensuring or non-ensuring about future cash flows. Management of cash flowsmeans any consciously functions for changing any reports and/or time table of cash flows which may lead tofinancial reports and for tricking the users. (Amy L, Geile, 2007In this research, we have considered any relations between management of cash flows and any costs forsupplying of foreign financial resources (debit costs within a period of time 2003-2007 in accepted companiesin Tehran Stock Exchange Organization. Also there is a difference between financial costs of both companiesgroups with managed or non-managed cash flows. The type of the capital structure is effective in management ofcash flows. It is in a way that management of cash flows is more obvious in those companies with financialresources mainly out of debits amounts. Different parts of cash flow includes changing of accounts receivable,stock of goods, short-term investment and circulating capital or debit costs.
We examine the differences in the net present values (NPV's) of North Sea oil projects obtained using the Weighted Average Cost of Capital (WACC) and a Modern Asset Pricing (MAP) method which involves the separate discounting of project cash flow components. NPV differences of more than $1 Om were found for some oil projects. Thus, the choice of valuation method will affect the development decisions of oil companies. The results of the MAP method are very sensitive to the choice of parameter values for the stochastic process used to model oil prices. Further research is recommended before the MAP method is used as the sole valuation model. (author)
The problem of agency costs of free cash flow in manager's hands has been firstly noted by Easterbrook and Jensen. We present one of the first attempts to formally model the problem in light of similar situation faced by managers of museums being allowed (or disallowed) to deaccession the artworks from their collections. We show that deaccessioning funds always lead to various forms of agency costs for the museum. This finding applies for any non-profit firm and its endowment. The task lying ...
Simin Banifatemi Kashi
Full Text Available This paper presents an empirical study to determine the effects of different factors including present profit, depreciation, working capital, operating cash flow and other accruals on future earnings stability. The study selects the information of 124 selected firms from Tehran Stock Exchange over the period 2006-2012. Using two regression analysis, the study has determined that as the fluctuation of profit increases, the profitability increases too. In addition, the study has concluded that firms with minimum fluctuations preserve more stable profitability. Moreover, firms with higher fluctuation in profitability maintain more volatile profitability for the next consecutive period.
"Look before you leap"; "a stitch in time saves nine"; "more haste, less speed". Many proverbs declare the wisdom of planning before doing. We suggest how to apply this to Excel, by explaining and specifying spreadsheets before coding them, so there will always be documentation for auditors and maintenance programmers. The specification method uses "pseudo-code": code that, for precision and conciseness, resembles a programming language, but is not executable. It is, however, based on the notation used by our Excelsior spreadsheet generator, which is executable. This paper is structured as a tutorial, in which we develop a simple cash-flow and loans spreadsheet.
Full Text Available We show that project evaluation should be based on free cash flows at nominal prices. We present a case where the results from the constant price method are biased upwards and there is a risk to accept bad projects. It is a widespread practice to evaluate projects at constant prices. With an example presented in the training on economic regulation of public utilities developed by the World Bank Institute we asses that methodology. We show an overvaluation of 21% when compared with the current prices methodology and using a correct Weighted Average Cost of Capital, WACC.
Emhjellen, Magne; Alaouze, Chris M.
We examine the differences in the net present values (NPV's) of North Sea oil projects obtained using the Weighted Average Cost of Capital (WACC) and a Modern Asset Pricing (MAP) method which involves the separate discounting of project cash flow components. NPV differences of more than $1 Om were found for some oil projects. Thus, the choice of valuation method will affect the development decisions of oil companies. The results of the MAP method are very sensitive to the choice of parameter values for the stochastic process used to model oil prices. Further research is recommended before the MAP method is used as the sole valuation model. (author)
Mohsen Sohrabi Araghi; Sharifaldin Attari
One of the major challenges facing all of individuals and organizations is decision-making based on the information. The issues of priority about cash flows and accruals data in decision-making process for different groups of financial statement users include investors, creditors, shareholders, directors, etc. one of the issues that has been controversial between accrual and cash accounting advocators for a long time. In this study, we survey the role of accruals and operating cash flows in d...
Statement of cash flows presents useful information about changing the company's financial position, allowing assessing the enterprise’s ability to generate future cash flows and cash equivalents in the operating, investing and financing activities and their appropriate use. Treasury forecasts are intended to contribute to financial security and enterprise profitability by reducing financial costs. Treasury of an economic entity can be considered its strong point. The manner in which they man...
Iriany Kereh, Soraya
Purpose of this study is to investigate whether the dividend policy can mediates the influence of free cash flow on the firm value in all industrial firms contained in IDX. Regression is the model used by this study to test the mediating variable in this case the dividend policy as measured by the dividend payout ratio (DPR) to the free cash flow as independent variable on the firm value as dependent variable. As well as firm size as control variable. Sample in this study are the entire firm ...
Full Text Available In order to improve the accuracy and real-time of all kinds of information in the cash business, and solve the problem which accuracy and stability is not high of the data linkage between cash inventory forecasting and cash management information in the commercial bank, a hybrid learning algorithm is proposed based on adaptive population activity particle swarm optimization (APAPSO algorithm combined with the least squares method (LMS to optimize the adaptive network-based fuzzy inference system (ANFIS model parameters. Through the introduction of metric function of population diversity to ensure the diversity of population and adaptive changes in inertia weight and learning factors, the optimization ability of the particle swarm optimization (PSO algorithm is improved, which avoids the premature convergence problem of the PSO algorithm. The simulation comparison experiments are carried out with BP-LMS algorithm and standard PSO-LMS by adopting real commercial banks’ cash flow data to verify the effectiveness of the proposed time series prediction of bank cash flow based on improved PSO-ANFIS optimization method. Simulation results show that the optimization speed is faster and the prediction accuracy is higher.
José I. Peláez
Full Text Available The stock market volatility and the actual stock Exchange activity have increased the need of counting with effective methods on the part of financial analysts to achieve a division in relation to the investment actions, being also growing the demand of methodological instruments that reduce and minimize the risks and uncertainty when valuating financial actives and companies. These systems not only must use quantitative information but the inclusion of qualitative information must also bear heavily on them, as an improvement element in the adjustment of these valuating methods, with the aim of throwing a more well-conceived or less mistaken decision.In this work, the use of Discounted Cash-Flow model is proposed, with quantitative information together with the OWA operators as an inclusion method of ualitative information in the traditional valuating models, with the aim of generating an strategic valuating system which allows to develop more agreed and less mistaken valuations
This presentation discusses the differences between the original Vehicle and Infrastructure Cash-Flow Evaluation (VICE) Model and the revamped version, VICE 2.0. The enhanced tool can now help assess projects to acquire vehicles and infrastructure, or to acquire vehicles only.
Davis, Michelle R.
This article reports that the crisis besetting U.S. and world financial markets is hitting school districts hard, as they struggle to float the bonds needed for capital projects, borrow money to ensure cash flow, and get access to investment funds locked up in troubled institutions. Some schools districts depend heavily on borrowed money to pay…
Brickner, Daniel R.; McCombs, Gary B.
In this article, the authors provide an instructional resource for presenting the indirect method of the statement of cash flows (SCF) in an introductory financial accounting course. The authors focus primarily on presenting a comprehensive example that illustrates the "why" of SCF preparation and show how journal entries and T-accounts can be…
Full Text Available Based on panel data of the listed companies in China’s stock market A during a period of year 2007-2010, we made an empirical study on what drives the investment cash flow sensitivity and the effect of management’s ownership and both their differences between the central state owned companies and the non-state owned companies as well. The sensitivity of investment to internal cash flow in China’s central state-owned companies can be explained by “hypothesis of free cash flow”. It is the cost of agency that causes over-investment behaviors, and the management’s ownership appears significant enhancement effect rather than entrenchment effect. However, the sensitivity of investment to internal cash flow in China’s non-state owned companies supports the explanation of “hypothesis of financial constraints”. Asymmetrical information causes under-investment behaviors of the firms. In the mean while, the entrenchment effect of manages’ ownership dominates the enhancement effect in non-state owned companies.
Why do U.S. firms hold much more cash now than they did 30 years ago? Prior empirical studies have discovered a statistically significant positive relationship between firm cash holdings and cash flow volatility. Such findings, however, are subject to endogeneity problems. In this paper, I construct a structural model of firm dynamics where cash provides a buffer against cash-flow shortfalls in the presence of costly external finance. My model finds that 63% of the increase in corporate cash ...
Cecilia Maya Ochoa
Full Text Available There exists an abysm between market prices and traditional valuation approaches such as Discounted Cash Flows (DCF, a fact that neither academics nor practitioners could continue ignoring. Recently, a complementary approach has taken a foothold into the valuation world. Building on the DCF approach yet going further in the sense of incorporating flexibility in management investment decisions, and taking advantage of the advances in option pricing theory, the real options approach (ROA has become the alternative to capital budgeting and, lately, to corporate valuation. Empirical evidence shows that ROA explains actual prices better than DCF approaches and nowadays there is no question that from a theoretical point of view, ROA is a much more appealing concept than passive NPV. However, its acceptance by practitioners has been very slow due to the complexity of real options pricing.Existe un abismo entre precios de Mercado y la valoración estimada por métodos tradicionales tales como Flujos de Caja Descontados, un hecho que ni académicos ni practicantes pueden continuar ignorando. Recientemente, una metodología complementaria ha tomado gran fuerza. Partiendo de los Flujos de Caja Descontados, pero incorporando flexibilidad en las decisiones de inversión y aprovechando los avances en la teoría de valoración de opciones, el enfoque de opciones reales (ROA se ha convertido en la alternativa para presupuestación de capital y valoración de empresas. La evidencia empírica muestra que ROA explica los precios de mercado mejor que los enfoques basados en flujos de caja descontados y, hoy en día, no hay discusión de que es más atractivo desde un punto de vista teórico; sin embargo, su utilización en la práctica ha sido muy limitada debido a las dificultades que presenta la valoración de las opciones reales.
1 - Description of program or function: REFCO83 utilizes a discounted cash flow (DCF) analysis procedure to calculate batch, cycle, and lifetime levelized average nuclear fuel cycle costs. The DCF analysis establishes an energy 'cost' associated with the fuel by requiring that the revenues from the sale of energy be adequate to pay the required return on outstanding capital, to pay all expenses including taxes, and to retire the outstanding investment to zero by the end of the economic life of the set of fuel investments. The program uses reactor mass flow information together with individual fuel cost parameters and utility capital structure and money costs to calculate levelized costs cumulatively through any batch or cycle. 2 - Method of solution: A fuel cycle cost component is considered to be any fuel material purchase, processing cost, or discharge material credit in the complete fuel cycle. The costs for each individual component, i.e. uranium, enrichment, etc., may either be expensed or capitalized for tax purposes or, in the case of waste disposal, the cost may also be made proportional to power production. To properly account for the effect of income taxes, all calculations in REFCO83 are done using 'then' current dollars, including price escalations caused by inflation. The database used for the default values for REFCO83 was taken from the Nuclear Energy Cost Data Base. 3 - Restrictions on the complexity of the problem: The maximum number of fuel batches is 120
Full Text Available In this paper we propose an analytical solution to the circularity problem between value and cost of capital. Our solution is derived starting from a central principle of finance that relates value today to value, cash flow, and the discount rate for next period. We present a general formulation without circularity for the equity value (E, cost of levered equity (Ke, levered firm value (V, and the weighted average cost of capital (WACC. We furthermore compare the results obtained from these formulas with the results of the application of the Adjusted Present Value approach (no circularity and the iterative solution of circularity based upon the iteration feature of a spreadsheet, concluding that all methods yield exactly the same answer. The advantage of this solution is that it avoids problems such as using manual methods (i.e., the popular “Rolling WACC” ignoring the circularity issue, setting a target leverage (usually constant with the inconsistencies that result from it, the wrong use of book values, or attributing the discrepancies in values to rounding errors.
Full Text Available The interest coverage ratios (ICRs are used to quantify the ability of firms to pay financial debts; ICRs are then considered by banks such as covenants in the financing term sheet, and are used by researchers and the rating agencies to estimate the probability of default of firms. Typically, ICRs calculation is based on profit margins, such as EBITDA and EBIT; EBITDA and EBIT approximate, but do not directly express, cash flows available to pay financial debts. The article aims to evaluate whether there are significant differences in results using ICRs based on EBITDA or EBIT and ICRs based on different definitions of cash flow (CF. The application is made to a sample of firms characterized by high absorption of capital operating in the Italian agro-food sector. The article highlights that there are statistically significant differences using ICRs EBITDA and EBIT based and ICRs based on different CF definitions.
Schmutz, Bryan P; Santerre, Rexford E
Unlike the pharmaceutical industry, no empirical research has focused on the factors influencing research and development (R&D) spending in the medical device industry. To fill that gap, this study examines how R&D spending is influenced by prior year cash flow and corporate market value using multiple regression analysis and a panel data set of medical device companies over the period 1962-2008. The empirical findings suggest that the elasticities of R&D spending with respect to cash flow and corporate market value equal 0.58 and 0.31, respectively. Moreover, based upon these estimates, simulations show that the recently enacted excise tax on medical devices, taken alone, will reduce R&D spending by approximately $4 billion and thereby lead to a minimum loss of $20 billion worth of human life years over the first 10 years of its enactment. PMID:23303706
Electric transmission and other rate cases use a form of the discounted cash flow model with a single long-term growth rate to estimate rates of return on equity. It cannot incorporate information about the appropriate time horizon for which analysts' estimates of earnings growth have predictive powers. Only a non-constant growth model can explicitly recognize the importance of the time horizon in an ROE calculation. (author)
In this dissertation I investigate whether market rewards to a pattern of increasing earnings vary with certain signals of whether the pattern is genuine or fabricated. Among these signals, I examine growth in cash flows, accrual-based earnings management, earnings management through the manipulation of real operating activities, and conservative accounting. The findings show that market participants assign higher price-earnings multiples to firms when their pattern of increasi...
Voloshyn, Ihor; Voloshyn, Mykyta
In this article, on the basis of the "cash flow at risk" approach, the system of the integrated (credit, market, operational and liquidity risks) risk management in a market-maker commercial bank is developed. This system guarantees reaching profitability, liquidity and coverage of banking risks and thus allows the fullest protection of the interests of depositors, creditors and shareholders of the bank providing its sustainable development.
Klumpes, Paul J.M.
Owing to the increasing prevalence of value-based methodologies and the competitive and political pressures faced by the industry to improve its performance, the U.K. life insurance industry provides an interesting environment in which to examine whether senior management uses accounting vs. projected cash-flow-based financial performance measures for both managerial performance evaluation and strategic budgetary planning and control purposes. A survey is employed to examine what economic and...
Tanja Markovič Hribernik
Full Text Available On May 1, 2004 ten new states joined the EU. At the same time, budgetary cash flow mechanisms between the EU budget (as the central subject and national budgets were established. Despite the fact that all the rules are clear and known in advance - stipulated by the EU directives and regulations - there are some uncertainties, which may have an important effect on the liquidity as well as on the budgetary cash flows in new member states. The greatest problem for the liquidity of new member states’ budgets is posed by the time lags between inflows and outflows of EU funds. These lags are mainly because of delayed payments from the EU budget and problems with some member state’s absorption capacity. This article deals with the dynamics and the scale of budgetary cash flows between the Slovenian budget and the EU budget until 2006. A couple of likely scenarios are presented, which could happen in case of delayed payments of European funds. Consequently, both an unexpected state budget liquidity deficit and an additional burden arising from interest on delayed payments to the Brussels are possible for Slovenia.
Full Text Available Financial statements as well as financial standards are always considered as primary sources for getting rich information of firms. The standards are normally divided in two categories of economic and accounting and each of these standards shows one of the specifications of the company and has its own advantageous and disadvantageous. There are different standards, which are used for firm assessment. Therefore, a company with more gained prominences has more change to succeed in attracting credits and financing from the capital market. Under such circumstances, such a company can attract more finance and it can be sold sooner on the stock exchange. This paper tries to investigate on the free cash flow as an effective factor in specifying the real value of the business enterprises on 56 selected firms from Tehran Stock Exchange. The results of this study have disclosed that, there was a direct and meaningful relationship between free cash flow of the business enterprises and their real values. Second, the real values of the business enterprises are more than their predicted values. Finally, the predicted value of the business enterprises on the basis of the free cash flow is more than their market value.
Presentation by Senior Engineer John Gonzales on Evaluating Investments in Natural Gas Vehicles and Infrastructure for Your Fleet using the Vehicle Infrastructure Cash-flow Estimation (VICE) 2.0 model.
Alan Nader Ackel Ghani
Full Text Available This article analyzes the credit constraints, using the cash flow sensitivity approach, of private and listed companies between 2007 and 2010. According to this approach, the econometric results show that the credit constraints are the same for either private or listed companies. This paper seeks to contribute to the literature because the study of credit constraints of private companies based on cash flow sensitivity in Brazil has been rare.
Farzad Karimi; Masoud Foladi; Nasim Shirazi
In this study, is evaluated the effect of surplus free cash flow on the relationship between board structure and earnings quality of listed companies in Tehran Stock Exchange. This study attempts to empirically examine the role of surplus free cash flow (SFCF) as a moderator on the relationship between board structure and earnings quality. The statistical society this study consisted of all companies listed on Tehran Stock Exchange during the period 2008 to 2012 that after applying the restri...
Pradana, Salvatore Wika Lingga
Penelitian ini bertujuan untuk mengetahui dan menganalisis faktor-faktor yang mempengaruhi Dividend Payout Ratio (DPR) seperti profitabilitas, free cash flow, dan investment opportunity set (IOS) pada perusahaan perbankan yang terdaftar di Bursa Efek Indonesia (BEI). Model regresi berganda (multiple regression) merupakan model analisis yang digunakan peneliti untuk menguji beberapa variabel yang diduga mempengaruhi dividend payout ratio, yaitu profitabilitas, free cash flow, dan investment op...
Full Text Available The cash flow of the company is an essential element for the application and development of a fluency activity where the payment terms are considered according to the agreement and contracts. Concerning the multinational companies, it is the finance controller’s task to perform a strict, realistic and predictive record regarding the subsequent cash flow of the company. The most important items that influence the existence and the assessment of a realistic operational cash flow are the following: accounts receivable, external open credit lines, headquarter treasury approved amounts, accounts payable, wages. Another tool to improve the global performance of the company is the cash-pool that can be used only for same currencies for the main countries involved in.
Full Text Available This research investigates whether the J-type firm (high agency cost of free cash flow provide more conservative financial statements than non J-type firm. Besides, this research also aim to examine the moderating effects of debt, dividend, stock repurchase, cash persistency, and corporate governance on the relationship between the level of agency cost of free cash flow and conservatism level of financial statements. This research uses two measurement of conservatism, namely accrual conservatism and market value conservatism. Research sample includes manufacturing companies listed in the Indonesian Stock Exchange for the year 2007, 2008 and 2010. The result proves that there is a positive and significant relationship between the level of agency cost of free cash flow and the two measurement of conservatism level of financial stataments. However, this research shows that there is no effect of the moderating variables on that relationship.
Mohsen Sohrabi Araghi
Full Text Available One of the major challenges facing all of individuals and organizations is decision-making based on the information. The issues of priority about cash flows and accruals data in decision-making process for different groups of financial statement users include investors, creditors, shareholders, directors, etc. one of the issues that has been controversial between accrual and cash accounting advocators for a long time. In this study, we survey the role of accruals and operating cash flows in decisions of financial statement users in listed companies on Tehran stock exchange, information content of operating cash flows and accruals in the connection with decision-making criteria used by different groups using financial statement has been examined. In this study, we use eliminating sampling and implied limitations and the sample size includes 203 companies to examine six hypotheses. The results of this research indicate that there is a significant different between accruals and operating cash flows information content in relation to various decision-making criteria but utilizing accruals and operating cash flows supplementary and simultaneously in profit frame depending on the selection criteria may or may not be include information value-added.
Charlotte Østergaard; Amir Sasson; Bent E. Sørensen
We study how non-listed firms trade off financial, real, and distributive uses of cash. We show that firms' marginal value of cash (MVC) affects the mix of external and internal finance used to absorb fluctuations in cash flows; in particular, high-MVC firms employ substantially more external finance on the margin. Linking firms to their main bank, we find that shocks to bank finance affect corporate trade-offs and have real effects in high-MVC firms, making investment more sensitive to firm ...
The investment formed capital over a period of time gives the company a sustainable cash flow , and cash flow to a discount rate that is used to meet the total risk of the company is the market value of the company . Meanwhile , the cash flow generated by the company ’ s assets can basically be divided into pay interest , taxes and shareholders income , and the three are discounted by different discount rate and the total value may also mean the company’s market value.This indicates that the company ’s market value has nothing to do with the proportion of the interest , taxes and the shareholders ’ income in the company ’ s total cash flow , and the company ’ s weighted cost of capital has nothing to do with the interest , taxes, and shareholders’ income value ratio.Therefore, it is be-lieved that there are no connections between corporate value , capital cost and capital structure .%公司投资而形成的资本经过一段时间会给公司带来一个持续的现金流，将该现金流用一个与公司总风险相适应的折现率折现而求得的价值即是公司的市场价值。同时，公司资产产生的现金流基本上可以分解为支付利息、税收和股东所得，三者分别按不同的折现率进行折现后所得的现价值之和也表示公司的市场价值。这表明公司的市场价值与利息、税收、股东所得在公司总现金流中的比例无关，而公司的加权资本成本与利息、税收、股东所得三者现价值比例也没有关系。因此，可以认为，资本结构同资本成本与公司价值无关。
This paper seeks to quantify the long-term financial impact of negative word of mouth (NWOM), an issue that has long challenged extant research. We do so with real-world data on firm security prices. The developed time-series models innovatively uncover (1) short- and long-term effects of NWOM on cash flows, stock returns, and stock volatilities, and (2) NWOM's “wear-in” effects (i.e., it takes a number of months before the stock price impact of NWOM reaches the peak point) and “wear-out” eff...
Draft. We combine static hedging and real options valuation ideas to build a capital budgeting technique. Here one applies the market information of derivative prices on a traded 'quasi twin security' to benchmark a single-step stochastic cash stream. We provide a transparent, more or less closed-form solution for valuing these streams. The fundamental properties of this valuation rule are then studied. The derivation of the pricing rule is developed in such a way as to generalize intuitive r...
The main objective of this thesis is to define the application of the cash flow Statement used within Chazep a.s., a company whose main business activity is based on groundwork, and its interconnection regarding other statements. In Chazep a.s. the given statement has been analysed with the aim to emphasise the possibility of further application of data within the company management. This thesis analysed the cash flow Statement of Chazep a.s. for the years 2007 -- 2009 by using the indicators...
Adhy Listya Paramitha
Full Text Available The purposes of this study were to determine fair share value, to analyze the factors that influence undervalue and overvalue, and to determine the best valuation method. This study made valuation using real options method and free cash flow to firm method. The results of partial logistic regression on Free Cash Flow to Firm showed that tenor variable and equity variable had positive and significant effects, while dummy variable had a negative and significant effect. In the real option model, tenor variable and implied volatility variable had positive and significant effects, while sheets of share variable had a negative and significant effect
Full Text Available The paper defines the concept of operating surplus. Then, it is compared to thegross operating surplus and the differences are identified. The two calculationmethods are presented next: (1 operating revenue less operating charges and(2 the gross operating surplus less ΔWCN (Working capital needs lessimmobilised production less stored production less other operating revenues.Then, a three year study is presented (2005-2007 and the results areinterpreted. Then, there is a correlation between the operating cash flow surplusand the operating cash flows.
Olajide, O. Adeola
Full Text Available This study focused on the income generating capacity offarm family’s own resources and examined the vulnerabilityto financial risk among the remote and peri-urban farmingsystems of Imo state. Primary data was collected using thefarming and rural systems approach to randomly select and interview 120 households. Descriptive statistics and Mann whitneytest were used in assessing between group differences while regression analysis was used to test the determinants of familyincome spread within the households. The results showed thatthe farming systems differed significantly in terms of rewards toresource use and efficiency. It also showed that remotely locatedhouseholds were more likely to be vulnerable to financial risks.A comparison of Male and Female Headed Households showedthat the households had similar income generating potentials butwith the cash flow analysis a safe conclusion may be reachedthat Female Headed Household were more financially unhealthy.
Full Text Available This study develops an inventory model for determining an optimal ordering policy for non-deteriorating items and time-dependent holding cost with delayed payments permitted by the supplier under inflation and time-discounting. The discounted cash flows approach is applied to study the problem analysis. Mathematical models have been derived under two different situations i.e. case I: The permissible delay period is less than cycle time for settling the account and case II: The permissible delay period is greater than or equal to cycle time for settling the account. An algorithm is used to obtain minimum total present value of the costs over the time horizon H. Finally, numerical example and sensitivity analysis demonstrate the applicability of the proposed model. The main purpose of this paper is to investigate the optimal cycle time and optimal payment time for an item so that annual total relevant cost is minimized.
Cristina Mihaela Onica
Full Text Available The evaluation and design of an performant accounting model has to be achieved using many financial and non-financial indicators in order to diminish their limits, and to realize an empirical research which will lead to the building of an set of indicators assessing the overall performance, adapted to Romanian business environment because, at the moment the need to use a set of indicators to provide a detailed picture of performance. Through the undertaken empirical research we had raised the development of some indicators in order to reflect as closely as possible the overall size of the analysed entity’s financial performance in the context of the assessment of cash flow.
This study demonstrates that a popular graphing calculator among students, TI-83 Plus, has a powerful function to draw the NPV profile and find the accurate multiple IRRs for a project with non-conventional cash flows. However, finance textbooks or related supplementary materials do not provide students instructions for this part. The detailed…
Jie-Sheng Wang; Chen-Xu Ning
In order to improve the accuracy and real-time of all kinds of information in the cash business, and solve the problem which accuracy and stability is not high of the data linkage between cash inventory forecasting and cash management information in the commercial bank, a hybrid learning algorithm is proposed based on adaptive population activity particle swarm optimization (APAPSO) algorithm combined with the least squares method (LMS) to optimize the adaptive network-based fuzzy inference s...
Vikash Gautam; Ashish Singh; Sarthak Gaurav
This paper attempts to explore the effect of finance constraints by examining the propensity of firms to save cash out of cash flows. Drawing on cash-cash flow sensitivity (CCFS), we overcome the errors in attributing information in cash flows to real and financial components. We employ endogenous regime switching model for our empirical exercise. This model allows for multiple sorting variables, does not require finance constraints to increase monotonically with the sorting variables and ena...
Subrahmanyam, Avanidhar; Titman, Sheridan
This paper explores how fincial market prices directly inflnce a firmâ€™s cash flows. Feedback from financial market prices to crash flows arises when firmsâ€™ non-financial stakeholders, e.g., its customers, employees, and suppliers, make decisions that are contingent on the information revealed by the price. When there are complementarities across these stakeholders, such feedback leads to cascades in which relatively small stock price moves trigger substantial changes in asset values. The ...
会计利润和现金流量都是评价企业业绩的重要指标,两者既有联系又有区别,在现实中,企业的会计利润和现金流量的数量关系始终处在矛盾中,难以协调,容易给会计信息使用者做出决策带来迷惑.本文分别从利润表和现金流量表的勾稽关系、会计利润和现金流量的区别进行分析,并使用一家上市公司——方大集团的财务数据进行具体说明,提出当一家企业会计利润和现金流量不一致时,企业可以从制定合理的应收账款信用政策、加强存货管理控制、协调企业各项活动现金流量之间的比例、准确合理地计提各项资产减值准备、同步企业和税务局对损益的认定标准、提高企业会计人员的职业道德修养等方面采取措施.%Accounting profit and cash flow are the important indexes to evaluate enterprise performance, there are both connection and difference between the two. In real life, the number relation between accounting profit and cash flow in the enterprise is always in contradiction, it is difficult to coordinate them. So, it will bring the captivation for accounting information users to make decisions. This paper analyzes the statement checked relationship between the income statement and cash flow and the difference between accounting profit and cash flow and it uses the financial data of China Fangda Group Co., Ltd. which is a public company to carry out the detailed description. It is put forward that when the accounting profit and cash flow are not consistent, the enterprise can take measures from formulating the reasonable account receivable credit policy, strengthening the inventory management control, coordinating the cash flow ratio among the activities, accurately and reasonably withdrawing the provision for diminution in value, bringing the profits and losses standards of enterprises and the revenue into step, enterprise accounting personnel's professional ethics
近年进入低成长期的白酒行业，不仅其价格的大起大落及相关政策的不断出台使其处于发展变化的风口浪尖上，而且其行业内部分公司所表现出的高自由现金流、高收益与“高派现”和谐并存的局面更是令我们疑惑不解：难道自由现金流理论在中国真的被推翻了？文章通过对2003年到2012年间白酒行业派现、自由现金流及代理成本的实证研究发现：尽管自由现金流水平的高低与企业的单位派现水平无显著相关性，但由于高自由现金流企业的派现意愿普遍更强，并且高股利支付率与企业的代理成本水平有显著负相关关系。即白酒行业的表现并未推翻自由现金流理论，只是国内上市公司股利支付水平普遍偏低，又缺乏高派现的内在动力，这才是导致自由现金流“悖论”假象产生的真正原因。%Application and interpretation of the theory of free cash flow must fit to some corresponding prerequisite, while both the external environment in Chinese stock market and corporate governance structure of domestic listed company do not fully meet these conditions. In recent years, some companies with high-yield and high free cash flow in the low-growth liquor industry have caused the public attention. Is the free cash flow theory ineffective in explaining the behavior of domestic enterprises? Based on the empirical study of the liquor industry's cash dividends, free cash flow and agency costs from 2003 to 2012, it can be concluded that there has not any significant correlation between the unit cash payment level and free cash flow. But the businesses with a high free cash flow generally has a relative stronger desire to pay cash dividend, and the high dividend payout ratio shows a significant negative correlation with the level of corporate agency costs. That proved that the free cash flow theory cannot be overthrown. It is just the low level of dividend payment in
The Discounted Cash Flow method is a long since well-known tool to assess the feasibility of investment projects, as the background which shapes a broad range of techniques, from the Cost-Benefit Analysis up to the Life-Cycle Cost Analysis. Its rationale lies in the comparison of deferred values, only once they have been discounted back to the present. The DCF variant proposed here fits into a specific application field. It is well-suited to the evaluations required in order to structure equitable transactions under the umbrella of Public-Private Partnership. •The discount rate relies upon the concept of expected return on equity, instead than on those of weighted average cost of capital, although the latter is the most common reference within the scope of real estate investment valuation.•Given a feasible project, whose Net Present Value is more than satisfactory, we aim to identify the amount of the additional burdens that could be charged to the project, under the condition of keeping the same economically viable.•The DCF variant essentially deals with an optimization problem, which can be solved by means of simple one-shot equations, derived from financial mathematics, or through iterative calculations if additional constraints must be considered. PMID:27054095
Bolek, Monika; Grosicki, Bartosz
W artykule autorzy rozważają problematykę związaną z możliwością prognozowania cash flow z działalności operacyjnej przedsiębiorstwa na podstawie wskaźników rentowności i wskaźników płynności. Wskaźniki płynności wskazują na strategię zarządzania kapitałem pracującym, co powinno determinować poziom cash flow generowanego przez przedsiębiorstwo, a cykl konwersji gotówki jest nie tylko dynamiczną miarą płynności, wskazującą na szybkość odzyskiwania gotówki zainwestowanej w cykl obrotowy, lecz t...
Full Text Available This paper presents a study to measure the effects of return on investment, sales growth rate, volatility investment, cash flow and structure of institutional shareholders on the ratio of debt to equities. The study selects 102 firms listed on Tehran Stock Exchange and, using regression technique with Panel data, examines five different hypotheses over the period 2008-2012. The results indicate that there was a negative and meaningful relationship between return of investment and the ratio of debt to equities and a positive and meaningful relationship between sales growth and the ratio of debt to equities. Moreover, there were positive and meaningful relationships between volatility of investment as well as cash flow and the ratio of debt to equities. Finally, the survey has indicated that there was a negative and meaningful relationship between the structure of institutional shareholders and the ratio of debt to equities.
Mohammad Sadegh Arabi Ashtiani
Full Text Available This study presents an empirical investigation to measure the relationship between traditional accounting performance measurement as well as theory of constraint-based figures with operating cash flow. Traditional accounting measurement includes net profit and return of investment and theory of constraint method includes net profit and return of investment based on theory of constraints. The study selects 69 firms list on Tehran Stock Exchange over the period 2000-2010. Using panel data and fixed effect, the study performs regression analysis and the results confirm that there was a positive relationship between net profit measured by theory of constraints and cash flow and it can be effectively used for performance measurement.
Mohammad Khodaei Valahzaghard
Full Text Available This paper presents an empirical investigation to study the effects of free cash flow, share diversification and capital structure on Tobin-Q in selected firms on Tehran Stock Exchange. The population of the survey includes 520 firms listed on this exchange until year 2012 and the survey uses a sample of 105 firms, randomly. The study uses the models originally developed by Palepu (1985 [Palepu, K. (1985. Diversification strategy, profit performance and the entropy measure. Strategic Management Journal, 6(3, 239-255.] to measure the effects of different factors on Tobin Q. The study has indicated that while capital structure and free cash flow influence positively on Tobin Q, diversification has maintained a negative and meaningful relationship with Tobin Q.
This paper seeks to expand on two topical strands in Government Finance and Political Science literature, rent-seeking and the soft-budget constraint, so as to bring forth a strong linkage with corporate governance environments. It will attempt to accomplish this task by setting up a distinctive framework of analysis that hinges on incremental cash flows. Firstly, it claims that both rent-seeking behavior and the soft-budget constraint are worthy of being applied to corporate governance learn...
Omid Imani Khoshkhoo
Full Text Available Information content of earnings and its components and other issues except the earnings such as the operating cash flow (OCF have been tested widely in the accounting and finance literature. Since they have had an essential role in most cases including financial reporting, contracts and evaluation models, specifying the items and financial variables that have had a significant relationship with these two variables are expected to be of utmost importance. One example of these variables and indicators is the value added. Although this variable has an economic concept, reporting of value added to the beneficiaries of business entity as the value-added statement has been observed in the field of accounting theories for many years. The main objective of this study was to investigate the effect of net value added (NVA as the basic result of value-added statement in predicting the accounting earnings and operating cash flow. For this purpose, the relationship of changes in net value added with the changes in accounting earnings and operating cash flow of listed companies in Tehran Stock Exchange from 2007 to 2011 was tested. Firstly the Single variable cross-sectional regression was analyzed and then the panel data analysis with the PLS technique was used to do a pooled analysis. The results of testing research hypothesis imply the significant relationship between changes in net value added and accounting earnings in the listed companies as cross-sectional and pooled forms. The results showed no significant relationship between changes in net value added and operating cash flow in the listed companies neither in cross-sectional nor pooled form.
Mohammad Sadegh Arabi Ashtiani
This study presents an empirical investigation to measure the relationship between traditional accounting performance measurement as well as theory of constraint-based figures with operating cash flow. Traditional accounting measurement includes net profit and return of investment and theory of constraint method includes net profit and return of investment based on theory of constraints. The study selects 69 firms list on Tehran Stock Exchange over the period 2000-2010. Using panel data and f...
Utami, Ayu Nindi
This research aims to determine the effect of positive accounting theory perspective (managerial ownership, public ownership, leverage, Firm Size, capital intensity), Growth oppurtunities and operating cash flow partially or simultaneously toward conservatism accounting services companies listed on the Indonesia stock exchange periodic 2010-2013. The population of this research is the services companies listed in Indonesia stock exchange in periodic 2010-2013. The samples taken are as many...
Emine ÇINA BAL; Öztürk, Veli
Businesses face interest rate, exchange rate, liquidity, use derivative financial instruments to hedge against such risks. Forward transactions with derivative financial instruments, the non-organized markets, interest rates pre-determined future date, foreign currency contracts that contain delivery of goods as well as financial assets. Cash flow hedge that forms the subject of this study, a recognized asset or liability or a highly probable forecast transaction and the net profit or los...
Analisis Pengaruh Free Cash Flow, Insider Ownership, Likuiditas, Profitabilitas Dan Leverage Terhadap Dividend Payout Ratio (Pada Perusahaan Manufaktur Sektor Industri Barang Konsumsi Yang Terdaftar Di Bursa Efek Indonesia)
Panggabean, Rindang Natasya
This study aims to test and find out about the influence of free cash flow, insider ownership, liquidity, profitability and leverage either partially or simultaneously on dividend payout ratio of manufacturing companies in consumer goods industry sector listed on the Indonesia Stock Exchange 2010-2013. The research is a quantitative study and the type of data used are secondary data obtained by researchers indirectly from the object of study. The data collection method used is the study ...
Mufliha, Titis Audiary
The aim of study was to analyze the effect of Corporate Life Cycle (RETE) dan Free Cash Flow to Equity (FCFE) on Dividend Policy (Dividend Payout Ratio) in manufacturing companies listed in Indonesia stock exchange. This study used the secondary data from www.idx.co.id. The sampling was based on the criteria in accordance with the objectives of the study. This study used casual associative design to determine the casual relationship between a variable to another variable. Th...
Omid Imani Khoshkhoo; Seyed Reza Seyed Nezhad Fahim; Masoud Mokhtari
Information content of earnings and its components and other issues except the earnings such as the operating cash flow (OCF) have been tested widely in the accounting and finance literature. Since they have had an essential role in most cases including financial reporting, contracts and evaluation models, specifying the items and financial variables that have had a significant relationship with these two variables are expected to be of utmost importance. One example of these variables and in...
Emine ÇINA BAL
Full Text Available Businesses face interest rate, exchange rate, liquidity, use derivative financial instruments to hedge against such risks. Forward transactions with derivative financial instruments, the non-organized markets, interest rates pre-determined future date, foreign currency contracts that contain delivery of goods as well as financial assets. Cash flow hedge that forms the subject of this study, a recognized asset or liability or a highly probable forecast transaction and the net profit or loss attributable to a particular risk of affecting the nature of a cash flow hedge to hedge changes in the process. Study the case of the application of foreign money has a tangible fixed asset purchases. Related to the purchase of tangible fixed assets at future foreign mercenaries were forward contracts to hedge the cash flow risk. Forward contracts, principal accounts on the balance sheet in accordance with IAS 39 Standard, derivative financial instruments are shown as fixed assets. The fair value of the contract during the contract period at the end of the period to show the valuation differences arising from the valuation of equity shown in the balance sheet. Net valuation differences arising from the contract are accounted for by two separate options. The first option, the net costs associated with the asset valuation difference. The second option is deducted from the amount of depreciation for the asset at the end of the period.
The Relationship between Earnings before Interest and Taxes and Operating Cash Flow and Stock Return under the Condition of Information Asymmetry in Abadan and Arak Petrochemical Companies through Markov-Switching Approach
Full Text Available This research investigated the relationship between earnings before interest and taxes and operating cash flow and shareholders’ return in Abadan and Arak Petrochemical Companies. This relationship was tested under the condition of information asymmetry. Nonlinear Markov-Switching approach was adopted to test the hypotheses. The results of empirical tests through the data in 2001-2010 indicated that in Arak Petrochemical Company, both variables of earnings before interest and taxes and operating cash flow had significant relationship with stock return of company. However, in Abadan Petrochemical Company, only the variable of earnings before interest and taxes had significant and positive relationship with stock return of company. Increase in information asymmetry showed that variable of operating cash flow had a stronger relationship with stock return of companies than the variable of earnings before interest and taxes. In other words, under the condition of information asymmetry, cash flow variables had higher correlation with stock return of companies than accrual variables.
Cabello, Julia García
Bank liquidity management has become a major issue during the financial crisis as liquidity shortages have intensified and have put pressure on banks to diversity and improve their liquidity sources. While a significant strand of the literature concentrates on wholesale liquidity generation and on the alternative to deposit funding, the management of an inventory of cash holdings within the banks' branches is also a relevant issue as any significant improvement in cash management at the bank distribution channels may have a positive effect in reducing liquidity tensions. In this paper, we propose a simple programme of cash efficiency for the banks' branches, very easy to implement, which conform to a set of instructions to be imposed from the bank to their branches. This model proves to significantly reduce cash holdings at branches thereby providing efficiency improvements in liquidity management. The methodology we propose is based on the definition of some stochastic processes combined with renewal processes, which capture the random elements of the cash flow, before applying suitable optimization programmes to all the costs involved in cash movements. The classical issue of the Transaction Demand for the Cash and some aspects of Inventory Theory are also present. Mathematics Subject Classification (2000) C02, C60, E50. PMID:24010026
Tuner, James A.
Many introductory finance texts present information on the capital budgeting process, including estimation of project cash flows. Typically, estimation of project cash flows begins with a calculation of net income. Getting from net income to cash flows requires accounting for non-cash items such as depreciation. Also important is the effect of…
Full Text Available The objective of this article is to develop and apply a specific discounting cash flow (DCF approach to evaluate investment in renovation to improve building quality, thus increasing energy efficiency. In this article, we develop and apply a specific net present value (NPV and an internal rate of return (IRR approach to quantify the value created for the owners of the building by the investment in renovation via energy-saving investments that produce positive externalities. The model has an applied interest because, in recent years, a lot of investments in real estate were made by owners in order to increase the green quality of the buildings, and several funds of public aid were provided by the government to stimulate these energy-saving investments. The model proposed here is applied to a case study of a 16-apartment building located in northern Italy considers the model attempts to quantify the initial investment value, the energy savings, the tax deduction of the initial investment and the terminal value of the investment as the increase in building value. The analysis shows that the model is consistent in evaluating investments to improve building quality, and investments within the context of the specific case study considered in the research have IRRs ranging from a minimum of 4.907% to a maximum of 12.980%. It could even be useful to consider a sample of cases to verify whether our results are representative of this specific case study. The model could represent a useful tool for consumers in evaluating their own investments in building renovation, from a stand-alone perspective and even by comparing them with other types of investment. The research could be developed in the future to quantify the social welfare generated by public spending via tax deductions to reduce the costs of investment in energy savings for buildings and could even be applied to new real estate projects in comparing different construction technologies and even
Jennergren, L. Peter
The conventional formula for the nominal growth rate of free cash flows (equal to dividends when there is no interest-bearing debt) says that this growth rate is equal to the product of the plowback ratio and the nominal rate of return on the assets (the latter equal to book equity when there is no debt). In a recent issue of the Journal of Applied Corporate Finance, M. Bradley and G. A. Jarrell claim that the conventional formula is wrong when there is positive inflation, proposing instead a...
Cash management can be defined as the optimization of cash flows and investment of excess cash in a corporation. But from an international perspective, cash management becomes very complex because of different laws among countries that pertain to cross-border cash transfers. Besides, the value of cross-border cash transfers is affected by the exchange rate fluctuations. This article is concerned with the optimization of cash flows in a multinational corporation and examines centralized cash m...
互联网企业创新投入的不确定性非常强，因而内部现金流的支持非常重要。不同模式创新的投资－现金流敏感性不同。狭义的互联网式创新不同于传统的科技式创新，主要以商业模式创新为主，这种创新形式的特殊性决定了其创新投资与现金流敏感性的独特关系。根据系统GM M法，上市互联网企业的创新投资与现金流之间存在显著正向关系，而且不同创新模式具有不同的创新投资－现金流敏感性，中外互联网企业的资金使用情况也有所不同。在互联网式创新理论分析和实证数据检验的基础上，应当看到中国目前典型的互联网式创新在利用现金流和中国人力资源等方面的优势，通过基础设施、政策法规、人才培养、管理体制四个方面，加快发展中国式互联网创新。%Internet companies'investment on innovation of is supported by cash flow .But different innovation models have distinct Innovative investment‐cash flow sensitivities . T he narrow definition of internet innovation is one kind of business model innovation and systematically differentiated with the technical innovation .Based on system GMM method ,publicly traded Internet firms have positive relation between innovative investment and cash flow and the difference between two models of internet innovations .Based on the internet innovation theory and empirical analysis ,it is clear that the China's unique version of internet innovation is good at using its current advantage in cash and human capital and other areas ,which further suggested that China should actively facilitate Internet innovation with stronger basic facilities ,law s regulations ,and human resources .
Obsahem této diplomové práce je řízení cash flow při minimální ceně stavební zakázky „Intenzifikace čističky odpadních vod Sokolov – I. etapa“. Jsou zde srovnány dvě varianty řízení cash flow zakázky, které se liší smluvními podmínkami mezi stavebním podnikem a zhotovitelem subdodávky. V první variantě podnik požaduje splatnost faktur 90 dnů a zajištění záruk pomocí bankovní garance po subdodavateli. V další variantě subdodavatel poskytl podniku možnost využit 9% skonta při splatnosti faktur ...
刘想; 刘银国; 张琛
Free cash flow holding is affected by corporate governance factors .T his paper uses the mod‐el of free cash flow holding under the influence of corporate governance factors ,selects 639 listed com‐panies in Shanghai and Shenzhen stock market in 2003~2012 as balance panel data ,and empirically tests how the different corporate governance factors affect the free cash flow holding .The results show that there is a gap between the free cash flow holding in Chinese listed companies and the best free cash flow holding ,the free cash flow holding adjustment is positively related with corporate in‐vestment level and the ratio of the largest shareholder and is negatively related with financial con‐straint ,and non‐state‐owned enterprise's free cash flow holding adjustment speed is faster than that of state‐owned enterprise .The research of this paper provides reference for the enterprise to determine the best free cash flow holding and improve the use efficiency .%自由现金流的持有会受到公司治理相关因素的影响。文章利用自由现金流持有水平在公司治理因素影响下的调整模型，以2003－2012年沪深两市639家上市公司的平衡面板数据为样本，就企业不同的公司治理因素如何影响自由现金流的持有水平进行实证检验。研究结果显示，我国上市公司自由现金流持有水平与最佳持有量存在一定差距；自由现金流持有水平的调整与企业投资水平、第一大股东持股比例呈正相关关系，与融资约束程度呈负相关关系；非国有企业的自由现金流持有水平调整速度快于国有企业。本文的研究可为企业确定最佳自由现金流持有水平并提高其使用效率提供参考。
US Agency for International Development — CART is a cash reconciliation tool that allows users to reconcile Agency cash disbursements with Treasury fund balances; track open unreconciled items; and create...
Eden Hatzvi; Jessica Meredith; Rose Kenney
This article uses results from the 2013 Survey of Consumers’ Use of Payment Methods and regression analysis to examine trends in cash use in Australia. The results show that cash remained the most common form of payment, though its use relative to other payment methods has declined over recent years. Older participants were more likely to use cash than younger participants and all participants were more likely to use cash for low-value transactions relative to other payment methods. In additi...
Irene Clara Pisón Fernández; Félix Puime Guillén; Miguel Ángel Crespo Cibrán
En este trabajo se analiza la problemática asociada a la producción de energía eléctrica de origen renovable, y se ofrece un modelo de definición de las variables en las que se apoya el plan de negocio de energía eólica. El plan de viabilidad muestra que los cash-flows para el accionista obtenidos en este tipo de proyectos permiten afrontar las inversiones futuras con una rentabilidad suficiente, que apunta al sector de energías renovables, y en particular al de energía eólica, como estratégi...
T he debt in the cash flow statement mainly causes from the operating activities ,the financing and investing activities .According to the economic activities of enterprise ,this paper classifies debts in-to operating debt ,financing debt and investing debt ,providing a new analytical thinking for financial theory and practice study .%债务主要成因于企业的经营活动、筹资活动和投资活动。根据企业的经济内容，把债务细分为经营性债务、融资性债务和投资性债务，为财务理论和实务研究提供一种新的分析思路。
Irene Clara Pisón Fernández
Full Text Available En este trabajo se analiza la problemática asociada a la producción de energía eléctrica de origen renovable, y se ofrece un modelo de definición de las variables en las que se apoya el plan de negocio de energía eólica. El plan de viabilidad muestra que los cash-flows para el accionista obtenidos en este tipo de proyectos permiten afrontar las inversiones futuras con una rentabilidad suficiente, que apunta al sector de energías renovables, y en particular al de energía eólica, como estratégico dentro de la economía española de las próximas décadas.
Şirket Değerlemede İndirgenmiş Nakit Akımları Yöntemi’nin Bir Girdisi Olarak Devam Eden Değer’in Belirlenmesi(In Corporate Valuation Determination of Continuing Value As A Input of Discounted Cash Flows Method
Full Text Available Three basic inputs or three independent variables are used in the applications of corporate valuation which considers discounted cash flows method.These are cash flows realized in the future,discount rate and continuing value.Continuing value is the company value of present value of cash flows after explicit forecast period.There are two basic approaches in the estimating of continuing value.First approach considers the cash flows after explicit forecast period and suggests Gordon Model,Value Driver Model and Economic Profit Method.Second approach does not consider the cash flows after explicit forecast period and suggests Liquidation Value Method and Relative Valuation Method.In the applications of corporate valuation,continuing value accounts for anywhere from 50 percent to 125 percent of total company value,therefore these models and methods separetely must be analysed and their results must be evaluated.
Full Text Available Cash management can be defined as the optimization of cash flows and investment of excess cash in a corporation. But from an international perspective, cash management becomes very complex because of different laws among countries that pertain to cross-border cash transfers. Besides, the value of cross-border cash transfers is affected by the exchange rate fluctuations. This article is concerned with the optimization of cash flows in a multinational corporation and examines centralized cash management approach and pooling technique in order to optimize the parent-subsidiary and inter-subsidiary cash flows.
Schmidt, Max; Schunter, Matthias; Weber, Arnd
Cash-like payments in electronic commerce and at the traditional point of sale are expected to be beneficial, e.g., because of privacy protection, low transaction costs, and irrevocability. Therefore, we discuss how to design electronic cash in a way that it both mirrors the most important characteristics of raditional cash, but also fulfils the expectations which arise towards electronic means of payment. We analyse the problems and trade-offs between the different characteristics to be impl...
Based on cash conversion cycle theory, the model of cash flow risks caused by late collection of the manufacturer which is in the middle position of a closed supply chain system was established.Each payment was set and the discount rate was added to improve cash flow model.Meanwhile, cost of sales ratio represented costs.When the optimal model of net cash inflow was set up, the corresponding of proportion of each payment, cash discounts and discount rate could be obtained;and their rela-tions could also be analyzed.It is suggested that if the cost of sales ratio is constant and the company determines the proportion of each payment, in accordance with a net cash inflow of risk minimization analysis, there will be some corresponding cash discounts and discount rates.Cash discounts and installments payment ratio are positively correlated but with a steeper changes.The higher the cost, the more stringent payment terms enterprises require.%基于现金循环周期理论，针对封闭供应链系统中间位置的制造商，建立了其应收账款延迟支付下的现金流风险模型。设定每期付款比例和加入贴现率以改善现金流模型，并引入销售成本率表示成本。以净现金流入风险最小为目标，得到由每期付款比例、现金折扣和贴现率组成的解集，并分析其变化关系。研究表明，销售成本率一定，当企业确定每期支付比例时，在净现金流入风险最小的约束下，以一定的现金折扣和贴现率与之对应。现金折扣与每期付款比例正相关，且其变动幅度更大，成本越高，企业要求的付款条件越苛刻。
Paul W. Bauer; Daniel A. Littman
The information age has led to many new forms of payment, including credit cards, debit cards, and online banking. In many ways, these new mechanisms seem preferable to cash. While the disappearance of cash is a very long way off, it seems people are starting to use it less.
Pless, Jacquelyn; Arent, Douglas J.; Logan, Jeffrey; Cochran, Jaquelin; Zinaman, Owen
One energy policy objective in the United States is to promote the adoption of technologies that provide consumers with stable, secure, and clean energy. Recent work provides anecdotal evidence of natural gas (NG) and renewable electricity (RE) synergies in the power sector, however few studies quantify the value of investing in NG and RE systems together as complements. This paper uses discounted cash flow analysis and real options analysis to value hybrid NG-RE systems in distributed applications, focusing on residential and commercial projects assumed to be located in the states of New York and Texas. Technology performance and operational risk profiles are modeled at the hourly level to capture variable RE output and NG prices are modeled stochastically as geometric Ornstein-Uhlenbeck (OU) stochastic processes to capture NG price uncertainty. The findings consistently suggest that NG-RE hybrid distributed systems are more favorable investments in the applications studied relative to their single-technology alternatives when incentives for renewables are available. In some cases, NG-only systems are the favorable investments. Understanding the value of investing in NG-RE hybrid systems provides insights into one avenue towards reducing greenhouse gas emissions, given the important role of NG and RE in the power sector.
Full Text Available Decision making about dividend payout is one of the most important decision that companies should encounter. Identifying factors that influence dividends can help managers in making an appropriate dividend policy. In the other side, companies’ dividend payouts over time and with a stable manner may influence on stock price, future earnings growth and finally investor's evaluation about owners' equity. Hence, investigating the factors influencing dividend payout ratio is of high importance. In this research, we investigate the effects of various factors on dividend payout ratio of Tehran Stock Exchange (TSE listed companies. We use time series regression (panel data in order to test the hypothesis of this study. This study provides empirical evidences by choosing a sample of 102 companies over the time span of 2005-2010. The result shows that independent variables of free cash flow and profitability current ratio have negative and significant impact on dividend payout ratio; whereas, the independent variable of leverage ratio has a positive and significant impact on dividend payout ratio. The other independent ratio such as size of the company, growth opportunities and systematic risk do not have any significant influence on dividend payout ratio.
Berndt, Thomas; Gossner, Stephan
This study examines whether the adoption of International Accounting Standards and International Financial Reporting Standards by German firms in 2005 improved earnings' predictive power with regard to forecasting future operating cash flow. We consider earnings' predictive power as one dimension of accounting quality. We use a data sample of German DAX and MDAX firms ranging from 2001 to 2011. The sample is split into two distinct subsamples (time period before and after 2005, the year of th...
Pengaruh Firm Size, Leverage, Return On Investment (Roi) Free Cash Flow (Fcf), Dividend Payout Ratio (Dpr),Dan Price Earning Ratio (Per) Terhadap Earning Management Pada Perusahaan Manufakturyang Terdaftar Di Bursa Efek Indonesia
Siallagan, Evi Handayani
The purpose of this research is to analyze the influence of firm size, leverage, free cash flow, return on investment, dividend payout ratio, and price earning ratio on earning management. Earning management is measured by discretionary accruals using Kaznik Model. This study uses secondary data were taken from the manufacturing companies which are listed in . Sample selection is done by purposive sampling method and sample obatained from this researh were 36 of a total 141 companies. Met...
The investigation of the difference between accounting data error in future operational cash flow predication , before and after adjust, due to inflation in accepted companies in Tehran stock exchange
Full Text Available The present research examines the difference between accounting data error in future operational cash flow predication before and after adjust due to inflation the population in this research include the accepted companies in Tehran stock exchange. The sample member companies financial statements by mean of current value – constant Rials were adjusted and were accounting data error in future and before adjust due to accounting inflation. After examination of the accounting data prediction before and after adjust, statistical data were tested by means of jariko method so that their normality by examined. The obtained results of jariko-Bera test indicate that the statistical data distribution is not normal. Therefore the sample couple signal Nonparametic test is used for investigation of difference between accounting data error in future cash floe prediction before and after adjust. the research hypothesis is : The accounting data error based on historical values is move than accounting data error based on current values in future period operational cash flow. The obtained results of sample even signal in relation to research hypothesis indication that we can accept the research hypothesis Normal 0 false false false EN-US X-NONE AR-SA
Bechmann, Ken L.; Raaballe, Johannes
financed by the issuance of new shares. Taxable cash dividends financed by the issuance of new shares then can be considered a positive kind of money burning whose role is to signal a firm's high quality. The implications of the models are consistent with several important empirical facts about dividends......Firms pay out cash using both dividends and share repurchases. In many aspects these twomeans are similar, but one important difference is that dividends are generally taxed more heavily than share repurchases. Nevertheless firms persist in paying out large amounts in dividends. This paper provides...
Under the modern enterprise system, management shareholding can transform the entrenchment effect between shareholders and managers into convergence interest effect, and reduce the excessive investment behavior of managers. Empirical research shows that there is conical relationship between management shareholding and enterprise excessive investment-free cash flow. There is a positive u-shaped relationship sensitivity between the excessive investment of free cash flow and management shareholding. When the management shareholding reaches a certain proportion, enterprise excessive investment has minimum sensitivity to free cash flow, so it has the maximum effect to restrain excessive investment at this point.%在现代企业制度下，通过管理层持股将股东与管理层之间的堑壕效应转化为利益协同效应，能有效减少管理层的过度投资行为。通过实证研究发现，管理层持股与企业过度投资—自由现金流存在二次曲线关系，过度投资对自由现金流的敏感性与管理层持股呈正U型关系。当管理层持股达到一定比例时，企业过度投资对自由现金流敏感度最低，对企业抑制过度投资的作用最大。
现金流量折现法作为目前最流行的一种评估公司战略的方法，在评估公司中发挥着非常重要的作用。将现金流量折现法应用到企业战略的评估中可以使公司从公司价值的角度综合分析公司未来发展，为公司制定出更加个性化的战略方案。通过对现金流量折现法及公司战略评估的详细介绍，运用基本理论和模型分析现金流量折现法评估公司战略的实例。通过实例的应用指出该方法在运用中遇到的障碍并进一步分析该方法的改进策略。最终评价了该方法的优势及不足，并预测其发展前景。%As one of the most poplar method in current enterprise evaluation,discounted cash flow method plays a very important role in evaluating a company.Here,the discounted cash flow method applied to the evaluation of enterprise strategy can make the enterprise comprehensively analysis the company′s future development from the perspective of the value of the company.It can develop a more personalized strategy for the company.Through the discounted cash flow method and the evaluation of the company′s strategy in detail,uses the basic theory and model analysis of discounted cash flow method to assess the instance of company strategy.By an example of application,it figure out the weakness of the method and further analyze the improvement of this method.Finally,evaluates the advantages and disadvantages of this method and predicts the development prospect.
A first article outlines that the solar energy sector attracts investors which are looking for secure returns. It is notably the case in the United States where companies are undergoing spectacular growth: solar installations are perceived as cash flow factories. A second article comments the consequences of this evolution of investments: the photovoltaic sector is now competitive and thus enters a new dimension with a mass development (indicators of installed power as it is in 2014 and will be 2019 are given for the main markets which are USA, Chile, Europe, South Africa, India, China, Japan and Australia). A third article comments this increase of investors who decide to invest in industries related to energy transition as they perceive these investments less risky on the long term, notably in relationship with climate. The success of crowd-funding practices is briefly evoked for projects related to sustainable development
José Vinícius de Avila Pacheco
Full Text Available Neste estudo, formulou-se o problema de gestão do fluxo de caixa encontrado em uma típica empresa agroindustrial como um modelo de otimização de fluxos em rede (com perdas e ganhos proposto em Golden, Liberatore e Lieberman (1979. O objetivo é maximizar o retorno dos recursos financeiros do caixa no final de um horizonte de planejamento multiperíodos e finito. Dois exemplos são estudados aplicando-se programação linear: no primeiro, o modelo original de fluxos em rede é usado para apoiar decisões operacionais de fluxo de caixa e, no segundo, o modelo é estendido para tratar de um planejamento tático de pagamentos de empréstimos. Os modelos matemáticos são resolvidos usando-se a ferramenta de otimização de um software de planilha eletrônica bem conhecido na prática de empresas. Os resultados numéricos obtidos mostram que os modelos são flexíveis e eficazes, sendo capazes de gerar soluções tão boas ou melhores do que as da tesouraria da empresa.In this study we formulate the cash flow management problem encountered in a typical agroindustrial company as a network flow optimization model (with gains and losses proposed in Golden, Liberatore e Lieberman (1979. The objective is to maximize the cash return of the financial resources at the end of a multi-period and finite planning horizon. Two examples are studied applying linear programming: in the first, the original network flow model is used to support operational cash flow decisions and in the second, the model is extended to deal with a tactical planning of loan payments. The mathematical models are solved using the optimization tool of a widely-used software spreadsheet package. The numerical results obtained show that the models are flexible and effective, being able to generate solutions, equal to or superior to the company solutions.
Baird, Sarah; Mcintosh, Craig; Ozler, Berk
Conditional Cash Transfer programs are "...the world's favorite new anti-poverty device," (The Economist, July 29 2010) yet little is known about the specific role of the conditions in driving their success. In this paper, we evaluate a unique cash transfer experiment targeted at adolescent girls in Malawi that featured both a conditional (CCT) and an unconditional (UCT) treatment arm. We ...
de Hoop, Jacobus; Rosati, Furio C.
Cash transfer programs are widely used in settings where child labor is prevalent. Although many of these programs are explicitly implemented to improve children's welfare, in theory their impact on child labor is undetermined. This paper systematically reviews the empirical evidence on the impact of cash transfers, conditional and unconditional, on child labor. The authors find no evidenc...
de Hoop, Jacobus; Rosati, Furio C.
Cash transfer programs are widely used in settings where child labor is prevalent. Although many of these programs are explicitly implemented to improve children's welfare, in theory their impact on child labor is undetermined. This paper systematically reviews the empirical evidence on the impact of cash transfers, conditional and unconditional, on child labor. The authors find no evidenc...
The paper introduced the discounted cash flow rate method applied to evaluate the resources value of a listing coal company and thus further to realize the evaluation of the listing company value.Meanwhile think this method was applied to evaluate the resource value of Jingyuan Coal and Electric Power Company and the listing company value.%介绍了采用贴现现金流量法评价煤炭上市公司资源价值,从而进一步实现对上市公司价值的评价的方法。同时使用该方法对靖远煤电公司的资源价值以及上市公司价值进行了评估。
Full Text Available E-cash is a payment system designed and implemented for making purchases over open networks such as the Internet. Need of a payment system which enables the electronic transactions are growing at the same time that the use of Internet is growing in our daily life. Present days electronic payment systems have a major problem, they cannot handle the security and the users anonymity and at the same time these systems are secure on the cost of their users anonymity. This paper shows the payment protocols for digital cash and discusses how a digital cash system can be formed by presenting a few of the present days digital cash systems in details. We also provide a comparison and determine them together to see which one of them fulfils the properties for digital cash and the required security level.
Utility management is paying increasing attention to the broadening of regulatory commission prudency reviews to cover operating generating plants as well as those under construction. Utilities can expect a prudency review after a major outage, and should investigate the possibility for legal action against a third party or be prepared to defend itself. The Shoreham nuclear plant serves as a warning to utilities of the need for on-going documentation of cost-benefit analyses conducted during the construction period. Utility managers should demand a prudency standard from their regulators, and minority owners in large projects should make independent prudency findings. There is also a growing need for utilities to develop intelligent strategies for handling excess cash. Methods for handling cash flow include the financial investment, grid refurbishment, dividend payout, decapitalization, and diversification.
Free cash flow (FCF) is cash flow in excess of that required to fund all projects that have positive net present values when discounted at the relevant cost of capital. Jensen published a treatise named "Agency Costs of Free Cash Flow, Corporate Finance and Takeovers" in 1986, puts forward FCF agency costs hypothesis, opened the link between FCF and agency costs, corporate governance. Because of the separation of ownership and manage- ment rights in modem enterprise, managers always make their own benefit maximization, and then resulting in the principal-agent problem and high agency costs. Managers have an incentive to use FCF for the excessive invest- ment, low efficiency acquisitions and discretionary revenue expenditure, and cause the decline in corporate per- formance finally. Is Jensen's agency costs hypothesis exists in the real China? How to control the Chinese state- owned enterprises' FCF reasonably; reduce position-related consumption and over-investment in senior manage- ment; and improve corporate performance, which becomes common issues need to address in the field of finance and corporate governance. This paper selected the sample of 2007 ~ 2010 Shanghai-listed company data, and em- pirically tested the correlation between FCF and position-related consumption, corporate performance in China's lis- ted companies. On this basis, the paper proposed the policy recommendations of optimization and control of FCF, and improvement of the corporate governance structure. From the study, we could see that Companies hold certain cash flow, indicating that companies have the ability to reward investors and selfvmanagement, but because incon- sistent with the objectives and information asymmetry between business owners and operators, there is differences in using FCF. Excess cash flow can often make the executives more easily for personal gain or the lack of due care and full consideration in disposing cash flow. At the same time as the management contract in
Salas-Molina, Francisco; Martin, Francisco J.; Rodríguez-Aguilar, Juan A.; Serrà, Joan; Arcos, Josep Ll.
Cash management is concerned with optimizing the short-term funding requirements of a company. To this end, different optimization strategies have been proposed to minimize costs using daily cash flow forecasts as the main input to the models. However, the effect of the accuracy of such forecasts on cash management policies has not been studied. In this article, using two real data sets from the textile industry, we show that predictive accuracy is highly correlated with cost savings when usi...
In India, conversion of land to cash-crop rather than subsistence production has effected the standard of living of rural women. Food security, which used to be attained by supplementing home-grown produce with income from agricultural labor, is now achieved with funds raised by selling cash crops. The quality of food purchased is often inferior to that formerly raised on homesteads. Greater quantities of a wider variety of food were consumed under the old system, and the quality of the food was assured. Cash is now a daily necessity, yet the supply of cash depends upon fluctuating markets beyond local control. Cash income can increase without any increase in real income, and purchases of necessary fertilizers are financed by loans with high rates of interest. Women have no control over how the increased income from cash is spent, and it is often dedicated to debt clearance, alcohol, and household items rather than food. In the past, women agricultural workers were paid in kind and received the same compensation that men received. When payments were converted to cash, women received less. Women's work has increased because they must gather fuel and fodder for the cattle after working in their own and others' fields. Formerly these raw materials were readily available from the residue of traditional crops. It is clear that traditional farming is more advantageous for small farmers than cash-cropping, but more and more small farmers are yielding to government propaganda and adopting the new system. Women are never consulted about such a switch, yet they suffer most from the loss of the flow of their nonmonetary resources into their households. PMID:12320725
Cabello, Julia García
Bank liquidity management has become a major issue during the financial crisis as liquidity shortages have intensified and have put pressure on banks to diversity and improve their liquidity sources. While a significant strand of the literature concentrates on wholesale liquidity generation and on the alternative to deposit funding, the management of an inventory of cash holdings within the banks’ branches is also a relevant issue as any significant improvement in cash management at the bank ...
In May of 2009, Community Development Finance (CDF) opened the first nonprofit, full-service check cashing store in the country in Fruitvale, California. The project is designed to provide low-income households with the financial services they need, without the asset-stripping characteristics common to the fringe banking industry. In addition to providing affordable check cashing services and a payday loan product, CDF also provides financial coaching and literacy training, small business ass...
The paper selects 127 ST companies in 2011 as financial distress companies, and each company is found in pair. Mak- ing use of the cash flow project data of the financial distress companies and non-financial distress companies from the yearT - 1 to the yearT-6, based on the test of the paired sample T, the conclusion has been reached that the financial distress is caused due to the funds raising beyond scale and main business gliding.%选取2011年127家ST公司为财务困境公司，并对每个困境公司进行配对，利用财务困境公司和非财务困境公司T-1年至T-6年现金流量项目数据，通过配对样本T检验，得出财务困境是因超规模筹资和主营业务下滑所导致的结论．
This paper is based on the sample of data of private listed companies during the period from 2006 to 2009,study the relationship between the internal governance of board of directors in private-owned enterprises and free cash flow.Our study derives the following two conclusions： ①there is no correlation between the scales of private listed company and its free cash flow,while the company＇s free cash flow is not relevant to whether board chairman and general manager is the same person neither;②the company＇s free cash flow has remarkable negative relation with proportion of independent directors in board of directors and the times of annual conference.%以我国民营上市公司2006-2009年数据为样本,分析民营企业董事会内部治理与自由现金流量的关系。研究得出以下结论：①我国民营上市公司董事会规模和董事长与总经理的两职分任与公司的自由现金流量不存在相关性;②董事会中的独立董事比例和董事会年度会议次数与企业自由现金流量呈现显著的负相关关系。
Free cash flow(FCF) is the cash flow freely dominated by corporate executives. The more free cash flow corporate has, the more likely corporate executives are to impair the interest of the owners. This may lead to position-related excessive consumption and uhimately lead to performance decline. This paper selects the 2006-2010 data of Shanghai-listed companies, empirically tests the relationship between free cash flow and the degree of position-related consumption in China's listed companies, and further tests the ownership' s and the level of corporate governance' s impact on the relationship between FCF and position-related consumption. Finally, this paper provides policy suggestions for improving corporate governance structure and constraining agent behavior reasonably.%自由现金流量是企业高管可以自由支配的现金流量。自由现金流量越多，企业高管越有可能出现损害所有者利益的行为，过度在职消费，从而最终导致企业绩效下降。本文选取2006—2010年沪市上市A股企业数据为样本，实证检验我国上市公司自由现金流和在职消费程度的关系，并进一步考察不同的所有制性质和公司治理水平对自由现金流和在职消费之间关系的影响。为完善公司治理结构、合理约束代理人行为提供政策建议。
Modeling and Treatment Applicable in the Establishment of the Necessary Variables for Testing the Mathematical Model Regarding the Contribution of the Amortization Method to The Estimation of the Cash Flows from the Use of Fixed Assets – Case Study Applied to the Groups of Societies within the European Space
Marinela - Daniela MANEA
Full Text Available The paper sets out to tackle with the problem of modeling the variables necessary for testing the suggested mathematical model – the net cash flows from using the tangible fixed assets for the year of analysis, the discount rate of the future cash flows, respectively the annual and cumulative amortization. In our attempt to prove that, starting from a given set of rules regarding amortization and complying with the considerations of the American implicit interest depreciation method, we can obtain a model through which the net cash flow from exploitation of an asset/group of assets can be expressed according to measure of the annual amortization, we considered it necessary to gradually present the successive steps of modeling the above mentioned aggregates in the practice of the societies within the European area. Likewise, there have been mentioned the limitations encountered in our research process in the set of annual financial situations of the groups of societies within the European area connected to the measurement of the above mentioned variables.
Folk, M D; Roest, P R
In recent years, increasing numbers of healthcare providers have converted their accounts receivable into cash through a process called securitization. This practice has gained popularity because it provides a means to raise capital necessary to healthcare organizations. Although securitization transactions can be complex, they may provide increased financial flexibility to providers as they prepare for continuing change in the healthcare industry. PMID:10145096
An expat in Beijing once wrote these words on his blog,"If you are anxious to exchange your valuables for cash,or want to collect some treasures in Beijing,you may visit Bao Rui Tong Pawn Shop which features agreeable environment,reliable credit,guaranteed quality and profes- sional service."That releases the com-
Certain strategies can offer not-for-profit hospitals potentially greater investment yields while maintaining stability and principal safety. Treasury inflation-indexed securities can offer good returns, low volatility, and inflation protection. "Enhanced cash" strategies offer liquidity and help to preserve capital. Stable value "wrappers" allow hospitals to pursue higher-yielding fixed-income securities without an increase in volatility. PMID:14560584
Financial crisis is the fundamental threat of a going-concern enterprise.Financial early-warning plays more important role in the business operation especially after global financial crisis.Cash is the blood of business and cash flow information can forecast financial crisis effectively as the direct reflection of business financial condition.The thesis takes empirical research on real estate industry using selected cash flow indicators,then establish cash flows financial early-warning model for real estate industry,can put forward thought to prevent financial crisis combined with real estate industry practice.%财务危机是威胁企业持续经营的根本性危机,财务预警作为经济运行的晴雨表和企业经营的警示灯,在全球金融危机后其重要性更加凸显。现金是企业的血液,现金流量信息作为企业实体资源和财务状况最直接的反映,对企业财务危机具有较强的财务判别和预警能力。本文以现金流量指标对房地产企业进行实证研究,建立房地产业的现金流财务预警模型并检验其预测财务危机能力,为房地产企业提供可操作的规避财务风险的思路。
陈晓峰; 王常杰; 王育民
In order to decrease crimes such as money laundering, blackmailing etc. inelectronic cash systems, fair electronic cash has been a major focus of academic research inelectronic commence. When a bank finds some dubious cash or owner, the trusted entity ortrustee can help him to revoke the anonymity of the cash. In the previous protocols, the trusteeknows all the information of the cash whether he is trusted or not, that is, he can trace the useror cash unconditionally. Furthermore, the dishonest trustee may deceive a user, which meansthat he may withdraw cash while tracing other users. Such cases are unfair to the honest users.A new fair electronic cash protocol based on untrustworthy trustees is proposed in thispaper. The key idea is that the coin structure should include the signatures of both the trusteeand the bank so that the trustee shares the information of the cash with the bank, while we donot use the secret sharing scheme. In contrast with the previous protocols, neither the trusteenor the bank can trace the money without the help of the other entity. In this way, the privacyof the user is protected furthest. Also, the trustee is off-line in the protocol, which meansthat he will not be involved in withdrawing the cash. Therefore, the protocol is efficient forimplementation.
Análise da Produção Científica sobre os fluxos de caixa e a demonstração dos fluxos de caixa: um estudo da Revista de Contabilidade e Finanças da Universidade de São Paulo, no período de 1989 a 2009 = Analysis of Scientific Literature on the Cash Flows and the Cash Flows Statement: a study of the Journal of Accounting and Finance, of the University of São Paulo from 1989 to 2009
Débora Gomes Machado
Full Text Available Em mercados cada vez mais competitivos, as empresas precisam de um diferencial que lhes traga vantagens em relação à concorrência. Esse diferencial deve contribuir para que a empresa se mantenha saudável no mercado e para com a administração, no intento de gerir de forma eficaz os seus fluxos de caixa. Neste enfoque, o presente estudo situa-se na gestão financeira e tem como objetivo verificar a produção científica sobre os fluxos de caixa e a Demonstração dos Fluxos de Caixa – DFC, na Revista de Contabilidade e Finanças da Universidade de São Paulo, no período de 1989 a 2009. O estudo foi realizado por meio de uma pesquisa bibliométrica, procurando identificar as características dos artigos analisados. Trata-se de uma pesquisa descritivo-exploratória, documental e de abordagem qualitativa. Verificou-se que as publicações científicas referentes aos fluxos de caixa e a Demonstração dos Fluxos de Caixa, na Revista Contabilidade e Finanças, não possuem um número expressivo de publicações relacionadas ao assunto, nos últimos 21 anos. Dentre as publicações identificou-se a quantidade de autores por artigo, as instituições de ensino superior a qual os mesmos estão vinculados, o autor seminal do tema, o tipo e origem das referências utilizadas e os principais temas abordados.In increasingly competitive markets, companies need a differential that will bring them advantages over the competition. This differential should help the company to remain healthy for the market and with the administration, in an attempt to effectively manage their cash flows. In this approach, this study lies in financial management and aims to verify the scientific literature on the cash flows and the Cash Flows Statement, in the Journal of Accounting and Finance, University of São Paulo, from 1989 to 2009. The study was conducted through a bibliometric research, aiming to identify the characteristics of the articles analyzed. This is a
Full Text Available For measuring the efficiency of management of cash, cash holding is one of the most important financial decisions that the manager of the concerned organization, has to make in the organization. Basically, it is observed that the organization hold cash for future purposes is very negligible. If the organization invested cash in profitable securities then there is some flexibility but when it relates to the capital market holding cash is not advantageous. Generally two contradictory theories such as Trade-off theory and the Pecking order theory are considered for measuring the efficiency of cash management. In this study we generally observed measured the efficiency of Cash Management influenced by Cash Holding. We also measured whether cash holding of the organization is affected with the degree of financial leverage, size of the organization, investment and profitability. This study helps us to understand the influence of DFL, Investment and Size of the organization on Cash holding. Proper holding of cash in cash management can prevent the bankruptcy of any organization and also increases the efficiency of Cash or Liquidity management.
Moore, R E
Management of patient accounts traditionally has treated billing and collections as separate functions, with staff members working accounts alphabetically by patient. In an integrated business office, however, staff members are trained in both billing and collections and are specialized according to payers. The advantages of a payer-specific design include more efficient contact with major payer groups and a better trained, more flexible staff. PMID:10145598
The exchange economy E can be reformulated as a strategic market game. In particular the point of concern here involves the introduction of a specified amount of credit or fiat money to monetize exchange. Dubey and Shubik (1979) and Shubik and Wilson (1977) have studied the possibility of introducing a fixed amount M of money to finance trade. When one formulates exchange as a game of strategy using any form of credit or fiat money where there is any possibility whatsoever that an individual ...
Israt Jahan; Mohammad Zahidur Rahman; K M Akkas Ali; Israt Jerin
There is an increase activity in research to improve the current electronic payment system which is parallel with the progress of internet. Electronic cash system is a cryptographic payment system which offers anonymity during withdrawal and purchase. Electronic cash displays serial numbers which can be recorded to allow further tracing. Contrary to their physical counterparts, e-cash have an inherent limitation; they are easy to copy and reuse (double-spending). An observer is a tamper-resis...
Andres Ramirez; Solomon Tadesse
We examine the relations between national cultures, the multinationality of the firm and its holdings of cash. We develop several hypotheses from well known corporate finance theories and theories of the multinational firm, positing that cultural factors as well as the degree of multinationality of firms influence their decisions to hold cash. In particular, firms in countries with high uncertainty avoidance, as a national culture, hold more cash as a way to hedge against undesired states of ...
Shy, Oz; Tarkka , Juha
We develop a theoretical framework aimed to model the pricing of electronic money (electronic cash cards) and the market domain in which it will be used. We first calculate the fee structures of electronic cash- and charge-card industries for the monopoly and competitive cases. We show that the different market structures do not affect the domain of electronic cash cards and the displacement of currency in daily transactions. We provide a welfare analysis to determine whether a market equilib...
Fan, Chun-I; Sun, Wei-Zhe; Hau, Hoi-Tung
Electronic cash (e-cash) is definitely one of the most popular research topics in the e-commerce field. It is very important that e-cash be able to hold the anonymity and accuracy in order to preserve the privacy and rights of customers. There are two types of e-cash in general, which are online e-cash and offline e-cash. Both systems have their own pros and cons and they can be used to construct various applications. In this paper, we pioneer to propose a provably secure and efficient offline e-cash scheme with date attachability based on the blind signature technique, where expiration date and deposit date can be embedded in an e-cash simultaneously. With the help of expiration date, the bank can manage the huge database much more easily against unlimited growth, and the deposit date cannot be forged so that users are able to calculate the amount of interests they can receive in the future correctly. Furthermore, we offer security analysis and formal proofs for all essential properties of offline e-cash, which are anonymity control, unforgeability, conditional-traceability, and no-swindling. PMID:24982931
Evelyn L. Forget
Full Text Available The austerity movement in high-income countries of Europe and North America has renewed calls for a guaranteed Basic Income. At the same time, conditional and unconditional cash transfers accompanied by rigorous impact evaluations have been conducted in low- and middle-income countries with the explicit support of the World Bank. Both Basic Income and cash transfer programs are more confidently designed when based on empirical evidence and social theory that explain how and why cash transfers to citizens are effective ways of encouraging investment in human capital through health and education spending. Are conditional cash transfers more effective and/or more efficient than unconditional transfers? Are means-tested transfers effective? This essay draws explicit parallels between Basic Income and unconditional cash transfers, and demonstrates that cash transfers to citizens work in remarkably similar ways in low-, middle- and high-income countries. It addresses the theoretical foundation of cash transfers. Of the four theories discussed, three explicitly acknowledge the interdependence of society and are based, in increasingly complex ways, on ideas of social inclusion. Only if we have an understanding of how cash transfers affect decision-making can we address questions of how best to design cash transfer schemes.
宋旻錞 Min-Chuen Sung; 林江亮 Chiang-Liang Lin
本文以我國私立大學校院為研究對象，探討自由現金流量與其成長機會之間的關聯。研究結果顯示，在考慮代理問題與監督效果影響之前，自由現金流量與私立大學校院的成長機會並沒有顯著關聯。經控制代理問題影響後發現，在高代理問題的樣本中，自由現金流量與成長機會呈顯著的負向關係；不過，將監督效果納入考慮後，其結論仍與未考量前相同。進一步將高代理問題樣本再依監督效 果強弱加以區分後發現，在高代理問題且高監督效果組中，自由現金流量與成長機會之間的負向關係並不顯著，只有在高代理問題且低監督效果組中，兩者才會呈現顯著的負向關聯。因此在考慮其他影響效果前，自由現金流量是否會為私立大學校院帶來成長機會，其結論並不明確。不過，對於高代理問題的私校而言，其自由現金流量會與成長機會呈顯著的負相關。然而，私校若可強化其監督機制，上述負面影響就會變得比較緩和，因此降低代理問題且加強監督機制，是私校追求成長機會的必要條件。 This study aims to explore whether free cash flows (FCF) can induce growth opportunities (GO) ...
The real estate industry is a capital intensive business which relies heavily on loans from commercial banks for financing.Meanwhile,the estate sale is quite vulnerable to the market and credit risks.All the traits mentioned above bring the liquidity problem to top agenda during their daily operation.Based on the analysis of cash flows in each property enterprise,this model sets the default threshold on the basis of the method of American options,and simulates the randomness in the sales of estate and the credit status of homebuyers in method of Wiener process.This paper gets the default probability for each listed real estate company by employing Monte Carlo simulations based on financial data of each company in 2012.The empirical results show that the model could identify the default risk in listed real estate companies with great fitness,which could be broadly utilized in practice.%房地产行业属资金密集型产业,银行贷款为其主要融资方式,其销售又面临市场与购房者信用风险,以上使得房产企业流动性问题突出.本文基于美式期权分析得出企业的违约条件,并运用维纳过程对房产的销售收入以及购房者信用状况变化的随机性进行模拟,得出企业各期现金流量.模型结合2012年各上市房地产公司的财务数据得出其违约概率.结果表明,该模型能较好地识别上市房地产公司的信用风险,具有较强的应用价值.
Shweta Srivastava; Vandana Saraswat
E-cash is a payment system designed and implemented for making purchases over open networks such as the Internet. Need of a payment system which enables the electronic transactions are growing at the same time that the use of Internet is growing in our daily life. Present days electronic payment systems have a major problem, they cannot handle the security and the users anonymity and at the same time these systems are secure on the cost of their users anonymity. This paper shows the payment p...
Uma Análise comparativa dos indicadores financeiros da Petrobras por meio da avaliação da demonstração dos fluxos de caixa do período de 2005 a 2007 = A Comparative Analysis of Petrobrás Inc. Financial Indicators Through an Evaluation of its Cash Flow Statement from 2005 to 2007
Letícia Goulart dos Santos
Full Text Available Uma das principais mudanças ocorridas no cenário atual foi a aprovação da Lei 11.638/07, que, entre outras alterações, determina a substituição da Demonstração de Origense Aplicações de Recursos – DOAR pela Demonstração dos Fluxos de Caixa – DFC. Essa, mudança é considerada benéfica para os investidores e usuários da informação por ser considerada de linguagem mais simples e clara. O objetivo do presente estudo é demonstrar a situação financeira da empresa Petrobras, no período de 2005, 2006 e2007, por meio da análise dos indicadores vinculados à Demonstração dos Fluxos de Caixa, que avaliam a liquidez. Uma ferramenta ainda pouco utilizada pelos acionistas são alguns indicadores que facilitam a interpretação da situação financeira da empresa por meio do fluxo de caixa. Os índices foram classificados em quatro grupos, relacionados à cobertura do caixa, à qualidade do resultado, ao dispêndio de capital e ao retorno do fluxo de caixa. Esses têm o propósito de avaliar desde a capacidade de pagamento a téas taxas de retorno de caixa. Em termos metodológicos, a pesquisa caracteriza-se, quanto os objetivos, como um estudo descritivo, e, quanto aos procedimentos, como um estudo de caso. Por meio deste estudo pode-se por fim demonstrar a importância dessa análise comparativa para que os envolvidos tenham uma visão mais profunda da verdadeiras atuação da empresa e das condições de continuidade do seu negócio.One of the most important changes that happened on the present economical scenery itwas the approval to the law n. 11.638/07, which sets, among other alterations, thereplacement of the Statements of Source and Application of Funds for the Cash FlowStatement.This switch is considered a benefit for both investors and users of this termdue to its simple and clear words. In this way, the purpose of this study is to report onthe financial situation of the Petrobras Inc. over the period of 2005,2006 and
... 23 Highways 1 2010-04-01 2010-04-01 false Cash management. 140.612 Section 140.612 Highways FEDERAL HIGHWAY ADMINISTRATION, DEPARTMENT OF TRANSPORTATION PAYMENT PROCEDURES REIMBURSEMENT Reimbursement for Bond Issue Projects § 140.612 Cash management. By July 1 of each year the SHA will...