Related Literature to the Cash Flow Management
The role of cash flow information in discriminating between bankrupt and non-bankrupt companies remains a contentious issue. In a number of literature reviews on bankruptcy prediction (e.g. Zavgren, 1983; Jones, 1987; Neill et al. 1991; Watson, 1996) the common view is that cash flow information does not contain significant incremental information content over accrual information in discriminating between bankrupt and non-bankrupt firms. (Divesh S. Sharma, Senior Lecturer, School of Accounting, Banking & Finance, Faculty of Commerce & Management, Griffith University, Nathan, Queensland 4111, Australia)
A cash flow statement is an important indicator of financial health because it is possible for a company to show profits while not having enough cash to sustain operations. It is a financial report that shows to the user the source of a company's cash and how it was spent over a specific period of time. A cash flow statement counters the ambiguity regarding a company's solvency that various accrual accounting measures create. It also categorizes the sources and uses of cash to provide the reader with an understanding of the amount of cash a company generates and uses in its operations, as opposed to the amount of cash provided by sources outside the company, such as borrowed funds or funds from stockholders. The cash flow statement also tells the reader how much money was spent for items that do not appear on the income statement, such as loan repayments, long-term asset purchases, and payment of cash dividends (Ryan 2007).
Read more: http://www.ukessays.com/dissertation/literature-review/literature-review-on-cash-flow-statements.php#ixzz2WGgTfcVF
Review of Cash Flow Failure Prediction Studies
The relevance of cash flow information for predicting bankruptcy was highlighted by Beaver (1966). Beaver (1966) reported that cash flow from operations (CFFO), proxied by net income plus depreciation, depletion and amortisation, to total debt had the lowest
A cash flow statement is an important indicator of financial health because it is possible for a company to show profits while not having enough cash to sustain operations. It is a financial report that shows to the user the source of a company's cash and how it was spent over a specific period of time. A cash flow statement counters the ambiguity regarding a company's solvency that various accrual accounting measures create. It also categorizes the sources and uses of cash to provide the reader with an understanding of the amount of cash a company generates and uses in its operations, as opposed to the amount of cash provided by sources outside the company, such as borrowed funds or funds from stockholders. The cash flow statement also tells the reader how much money was spent for items that do not appear on the income statement, such as loan repayments, long-term asset purchases, and payment of cash dividends (Ryan 2007).
Read more: http://www.ukessays.com/dissertation/literature-review/literature-review-on-cash-flow-statements.php#ixzz2WGgTfcVF
Review of Cash Flow Failure Prediction Studies
The relevance of cash flow information for predicting bankruptcy was highlighted by Beaver (1966). Beaver (1966) reported that cash flow from operations (CFFO), proxied by net income plus depreciation, depletion and amortisation, to total debt had the lowest