Search results for: 'Cash-flow Statement'
Introduction to financial accounting CF2-107-I
This technical note gives a thorough introduction to financial accounting vocabulary, elements and processes. It includes explanations and examples of key concepts such as the basic financial statements (Balance Sheet, Income Statement, Statement of Cash Flows and Statement of Retained Earnings), T-accounts and journal entries, and inventory methods. It is designed such that students can follow along easily without a professor’s guidance and would serve well as a reference or pre-class reading in a basic accounting course.Academic Area:Financial Accounting
Norbama Corp. CF1-121-I
In this case, Norbama Corp. would like to expand its production facilities. Before doing so, Norbama Corp.’s CEO analyzes Sigmar Corp., its competitor that recently developed an investment program. The CEO wanted to understand how the competitor had invested, how it financed the investments and the impact of this plan on its balance sheet. The comparative balance sheets for 2009 and 2010, as well as the summary of the 2010 income statement, the income distribution for 2010 and additional information from the annual report are provided. With this information, the CEO of Norbama Corp. prepares the statement of cash flows for 2010 in order to better understand Sigmar Corp.’s financial situation after its expansion effort and to evaluate the competitor’s plan.Academic Area:Financial Accounting
La importancia del cash-flow en la gestión financier … DF2-167
Cash flow is the most rigorous financial tool used in today's corporate world. It is rigorous by itself, as it is not subject to influences that give different results under each interpretation. The statement of cash flows has reached vital importance nowadays in corporate finance. It is important to manage cash flow almost daily using efficient tools like cash pooling. On the other hand, it is also important to remember that there are different types of cash flows to be used depending on the objective you are after.Academic Area:Finance
Accounting as a source of Information for financiers DF2-162-I
The general accounts are a useful tool for the company and are intended as a source of information. This information has to follow a set of rules and principles and must be recorded using the principle of double-entry bookkeeping. The finance department’s guiding principle is to "maximize the long-term economic value for shareholders." To generate economic value in the long term, the returns obtained from management of the assets in the normal course of business must exceed the financial cost of the resources funding them.
This technical note explains how concepts of accounting are particularly useful to obtain certain financial information. It talks about general accounting and its guiding principles, the profit and loss account, the balance sheet, accounting statements, liabilities, equity, assets, accounting records, depreciation, provisions, investment and financing decisions and finally cash flows, weighted average cost of capital and discounted cash flow.Academic Area:Financial Accounting | Finance
The Statement of Cash Flows CF1-113-I-M
The Statement of Cash Flows is an interactive tutorial which reviews the basic concepts of cash flow details the preparation of the financial statement under both the direct and indirect methods and helps students to develop the necessary skills to correctly analyze the statement of cash flows.
Students are able to explore both the indirect and direct methods for preparing this statement through an interactive statement analysis. The tutorial also includes the analysis of three well-known companies - Telefónica Amazon and Siemens.Academic Area:Financial Accounting
This is an interactive tutorial which aims to clarify the key concepts of depreciation and take an in-depth look at the effects that different depreciation methods have on companies. Through the use of a calculator students can calculate the depreciation schedule visualizing the results graphically and then compare how changes in the useful life and residual value affect depreciation expense.
This interactive tutorial consists of five sections:
- A general depreciation theory test
- A methods test looking at how different depreciation techniques can affect a company&rsquos financial statements
- A flexible depreciation calculator accompanied by two reflection exercises
- A detailed case analysis focusing on net income effects and cash flow
- A real-world example section analyzing the depreciation strategies of different companies.Academic Area:Financial Accounting
What does the financial viewpoint contribute to a bu … DF2-207-I
This technical note (TN) explains in detail the tools that can be used to analyze the financial feasibility and profitability of a business decision. Firstly, the TN emphasizes that managers must understand financial statements and their limitations. The statements do not aim to tell all the "truth" about the business; they aim to offer a reasonably honest approximation to certain aspects of it. Using Valparaiso SL as an example, readers are walked through an analysis of the profit and loss account and the balance sheet. The TN stresses that judging how well a company is managed solely on the basis of the information in the profit and loss account may lead us to form an incorrect view of what is going on in the company. Then the company’s profitability, funds flow and liquidity are analyzed and explained. Next, the cash flow statement is shown and readers learn that there are a number of different formats in which the information shown in the cash flow statement can be presented. The case wraps up by explaining that the criterion to judge whether a company is well-managed consists of analyzing its feasibility (measured in terms of the generation of net liquidity) and its profitability in real or financial terms. In sum, it is necessary to know what information is provided by the company's accounting statements, how this information relates to the business reality and what is or is not important for generating sustainable profitability.Academic Area:Finance
How to analyze the economic feasibility of a busines … DF2-209-I
This technical note takes a look at the feasibility of a joint venture, UTE Construmás, which was set up to build a parking lot. Readers must figure out how much money they need in order for the joint venture to be feasible and what financial resources must be provided over Construmás’s lifetime. In order to do so, the case walks readers through six stages to analyze its economic viability: establishing the time horizon of the forecast, determining the assumptions for the forecast, deriving the forecast profit and loss statement for the company, calculating the balance sheet associated with the forecast profit and loss statement, deducing the forecast cash flow situation, and drawing conclusions. Readers are provided with details and financial information for each stage. After going through the stages, a conclusion is reached about building the parking lot through a join venture and its profitability from an accounting point of view. However, it must also cover a peak liquidity requirement which cannot be solved by increasing turnover.Academic Area:Finance