THE ELEMENTS OF A CASH FLOW PROJECTION A capital budgeting decision is characterized by costs and benefits (cash flows) that are spread out over several time periods. This leads to a requirement that the time value of money be considered in order to evaluate the alternatives correctly. Although in actual practice we must consider risk as well as time value‚ to situations in which the costs and benefits (in terms of cash) are known with certainty. There are sufficient difficulties in just taking
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*** Get Off Of My Case‚ Version 2.0 *** Kellogg School of Management Northwestern University December‚ 2003 Edwin Van Dusen‚ Brian Fox and David Welch (MBAs 2004) prepared this document under the supervision on Professor Sonia Marciano. Copyright © 2003 by the Kellogg School of Management. No part of this publication may be reproduced‚ stored in a retrieval system‚ used in a spreadsheet‚ or transmitted in any form or by any means – electronic‚ mechanical‚ photocopying‚ recording‚ or otherwise
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The importance of the concept of cash-flow for the business finance Definition: Cash flow is the movement of money into or out of a business‚ an account or an investment. Normally‚ when the cash inflow is greater than the cash outflow it is a sign of a good financial situation because cash flow is essential for the survival of a business or even to any individual financial condition. If the company can meet its obligations and keep a healthy inflow of cash it has a healthy situation and the
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E S 5 & 6 Cash flow reporting and analysis REVISED BY DR SIMONA SCARPARO (FEBRUARY 2013). EARLIER R E V I S E D B Y D R G U S H O S S A R I ( J A N U A R Y 2 0 1 0 ) ‚ B A S E D O N O R I G I N A L M AT E R I A L P R E PA R E D BY GARRY CARNEGIE‚ GRAEME W INE‚ CHRISTINE JUBB AND JUDY NAGY Contents Lectures 5 & 6: Introduction 1 Objectives 1 Learning resources 1 Prescribed text Online readings Glossary CloudDeakin 1 2 2 2 Importance of cash flow information
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Writing Assignment Week 1 Question 2.2 – Accounting and Cash Flows: Why is it that the revenue and cost figures shown on a standard income statement may not be representative of the actual cash inflows and outflows that occurred during a period? Financial Statements are prepared according to accrual rule of ‚ according to which cost and revenue are recorded as they occur and not when they are actually received or paid. This is why cash flows during the year may be different from revenue and costs
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and Indirect Cash Flows Marlene A Broaddus-Waddell XACC-291 June 27‚ 2013 The difference between direct and indirect method of cash flows are the operating activities‚ which is the first section of the statement of cash flows. The investing and financing activities sections has no reported differences in the presentation of the cash flows. The direct presentation of cash flows displays cash receipts and payments from operations‚ more or less like the actual statement of cash flow. On the other
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Direct and Indirect Cash Flows Christine Grae XACC/291 Principles of Accounting II March 29‚ 2015 Susan Schulz When companies utilize the accrual method of accounting‚ they will prepare a cash flow statement in order to understand the flow of cash. We call this method the cash flow statement and it can be prepared in two different methods which would be indirect and direct. The methods are different but they both will be conducted with the same results for the accounting period. The direct
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FINANCIAL STATEMENTS AND CASH FLOW 1. Liquidity measures how quickly and easily an asset can be converted to cash without significant loss in value. It’s desirable for firms to have high liquidity so that they have a large factor of safety in meeting short-term creditor demands. However‚ since liquidity also has an opportunity cost associated with it - namely that higher returns can generally be found by investing the cash into productive assets - low liquidity levels are also desirable to the
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CASH FLOW STATEMENT and its ANALYSIS Cash flow statement • A cash flow statement presents information about the cash flows associated with the company’s main operations and those associated with its investing and financing activities of the period • A cash flow statement functions in conjunction with both the income statement (performance dimension) and the balance sheet (financial position) • IAS 7 Cash Flow Statements Statement of Cash Flows • Provides information about cash inflows and outflows
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Analysis of Cash Flows Statements By Song Hanxiao Pace University – New York Campus MBA 640‚ 72052 Fall 2011 John Paul Required Research Paper Contents Abstract --------------------------------------------------------------------------------------------------------3 | I. Introduction of importance of Cash Flows statements -------------------------------------4 | II. Function of Cash Flow Statements -----------------------------------------------------------5
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