Abstract This paper reviews the statement of cashflows for Papa John's Pizza and Dominos Pizza, and identifies how much cash was generated or used by operating, financing and investing activities. Using the statement of cashflows, the paper identifies some of the significant internal events that affected the company's cash position. The paper describes the changes in revenues and net incomes over the company's solvency, liquidity and profitability.
Tags:statement of cashflows, liquidity and solvency, ratio analysis, comparative analysis
Abstract This paper is on cashflow for a small software company, noting the particular requirements of such a company and the way cashflow can be used to make decisions about the company.
From the Paper "Managerial accounting entails various specific elements of cash flow, but these and their effects may differ from one type of business to another. Different types of cash flow have to be considered for a software company, based on the business requirements, workforce, and business environment. One analyst notes that "growing software companies track the actual cash going in and out of the business very closely" (Crankshaw para. 7). Crankshaw also notes that in a software company, engineering, marketing, and operations often make product-related decisions "that not only strengthen the company's infrastructure and its competitive advantage in the marketplace, but that improve cash flow as well" (Crankshaw para. 3). The reason for this is because there are many non-cash events that can have a negative effect on profitability that can thus distort the image of the cash flowing through the business."
Abstract This paper explores the four basic financial statements used by companies to analyze company performance- the balance sheet, statement of cashflows, statement of retained earnings and the income statement. Furthermore, the paper examines the uses of these financial statements to both internal and external stakeholders of the corporation. Finally, the inter-relationships between the four financial statements is discussed.
From the Paper "Investors: The most important stakeholder in a corporation is an investor. Investors look at financial statements in detail to find out if their investment would give good returns. If a company's balance sheet shows negative worth, investors would be reluctant to invest in the company. Furthermore, investors also look at other statements to make an informed decision. For example, a potential small investor would want to look at the company's income statement to determine whether an investment would be worthwhile."
Tags: accounting stakeholder investor, balance sheet, cashflow, retained earnings, income
Abstract This paper explains that the four basic financial statements are the balance sheet, the income statement, the cashflowstatement, and the statement of stockholders' equity. This paper refers to each, in part, and then emphasizes the interrelations between them.
From the Paper "Resuming what I have argued for previously, there are two major arguments that demonstrate the interrelationship between the four basic financial statements. First of all, many of the values that are reflected in one statement generally find themselves in another. Even more so, there is a flow of information from one financial statement to another. As we have seen in the examples above, data from the cash flow statement is recorded on the statement of stockholders' equity or on the balance sheet."
Abstract This paper describes the balance sheet, the income statement and the statement of cashflows. It examines three companies, Exxon Mobil, Ford Motor Company and Microsoft, and asks and answers questions about their financial condition and future prospects
From the Paper "A Balance Statement is a financial statement showing assets, liabilities and net worth at a specific time. Under generally accepted accounting principles (GAAP) the following rules apply to the creation of balance sheets: assets are to be defined as items of value both tangible and intangible that a company owns or controls; liabilities are debt sowed by an organization; equity is a residual account; equity equals assets minus liabilities; current assets are assets that will become cash in the ordinary course of business within one year..."
Tags: balance sheet income statement, cashflowstatement, GAAP, FASB, SEC, Ford Motor Company, Exxon Mobil, Microsoft, financial highlights
Abstract This paper claims that according to the United States Securities and Exchange Commission, financial statements can be produced in a variety of forms to serve a wide range of purposes in determining the economic viability of an organization. Firstly the paper reviews reviews the use of the balance sheet demonstrates the assets, liabilities and shareholders equity. Secondly, income statements demonstrate income and loss of the organization over a period of time. Third, cashflowstatements provide information as to the historical flow of money through the organization, as well as determine if there is a sufficient monetary amount to satisfy debts in the course of business. Finally, a shareholder's equity statement is explored.
From the Paper "According the United States Securities and Exchange Commission financial statements can be produced in a variety of forms, to serve a wide range of purposes in determining the economic viability of an organization. First, a balance sheet demonstrates a company's " assets, liabilities and shareholders' equity" ("Beginners", 2004, sec. 3). These are the items that a company may have on hand that are of value, the debts of the company, and the monetary worth of the company, after debts, if it were sold ("Beginners", 2004, sec. 3). Secondly, income statements demonstrate income and loss of the organization over a period of time ("Beginners", 2004, sec. 4). Third, cash flow statements provide information as to the historical flow of money through the organization, as well as determine if there is a sufficient monetary amount to satisfy debts in the course of business ("Beginners", 2004, sec. 5). Finally, a shareholder's equity statement ..."
Abstract This paper explains the process of cashflow management. The author discusses the proactive role that the company treasurer can take in managing the credit and collection function. The paper describes the job of various employees in financial management.
From the Paper "According to Lucy Reuben writing in "Black Collegian" every organization, private or public, large or small, depends upon a management team that generates cash inflows sufficient to cover required cash outlays. Corporate financial management covers a diverse range of responsibilities related to the procurement and use of cash flows. These responsibilities are generally divided between a treasurer and a controller who both report to the vice-president of finance. The controller handles issues such as capital budgeting profit and loss analysis and working capital management. The treasurer's side ..."
Abstract This paper compares and contrasts the capital asset pricing model (CAPM) and the discounted cashflow (DCF) model in valuing common stock. The paper holds that, because of the complexity and importance of valuing common stock, the above techniques have been devised over time to accomplish this task. It points out that CAPM focuses on inputs to calculate stock prices that are external to the firm while the DCF model focuses on internal factors. Also, CAPM is concerned with growth rate, while DCF is concerned with estimated returns. The paper concludes that both models are important to investors and expanding companies.
From the Paper "For a firm that is expanding, it is difficult to establish a proper growth rate for the DCF. If past growth rates in earnings and dividends have been relatively stable, and if investors appear to be projecting a continuation of past trends, then the growth rate may be based on the firm's historic growth rate. However, if the company's past growth has been abnormally high or low, either because of its own unique situation or because of economic fluctuations, then the growth rate has to be estimated in some other manner."
Abstract This paper explains that investors can evaluate the desirability of investing in United Parcel Service (UPS) and Federal Express Corporation (FedEx) by examining their financial statements, such as the cashflowstatements and the annual reports, which these publicly traded companies are required to file with the Securities and Exchange Commission (SEC). The author points out, when evaluating cashflowstatements, it becomes apparent that many internal events affect the cashflow position of the organization such as an increase of expenses rising in comparison to the previous year in gas prices. The paper relates that analysis ratios, such as Current Ratio, Return on Sales, Earnings per Share (EPS), Debt Ratio, and Price to Earnings (PE) Ratio, are helpful in determining a company's solvency, liquidity and profitability; both companies are liquid and solvent because both companies' current assets (cash, accounts receivable, inventory and short-term investments) outweigh their short-term liabilities. Chart.
Table of Contents
The CashFlowStatement - UPS
CashFlowStatement - FedEx
Internal Events - UPS
Internal Events - FedEx
Revenue and Net Income
Financial Analysis Ratios
Discussion
From the Paper "The Income Statements generated by these organizations also help any outsider gain insight into these organizations' revenue and net income statistics. United Parcel Service Inc. conducts its financial statements through a calendar year, starting on January 1 and ending on December 31. Over the last couple of years, the company's revenue has increased by $5.31 billion. December 31, 2002, finished with an amount of $31,272,000,000 in total revenue, followed by $33,485,000,000 on December 31, 2003. The most recent revenue is of $36,582,000,000 for the end of last year, December 31, 2004. It would be extremely welcoming for UPS to maintain all of its revenue; however, there are other expenses and costs that the organization must pay accordingly, which leads to the anticipated number of Net Income. UPS' Net Income continues to grow along with its revenue. On the December 31, 2002, UPS' books show a net income of $3,182,000,000."
Abstract This paper explains several accounting concepts including the relevance of each section of the statement of cashflows, as well as the importance of the balance sheet to financial analysis. The paper also explores importance and relevance of the explanatory notes to companies financial statements.
From the Paper "The statement of cash flows presents information about cash inflows and cash outflows. The statement separates cash flows into three distinct activities which are operating activities, investing activities and financing activities. The combined net increase or decrease in cash and cash equivalents from these three sections of the statement of cash flows is reported near the end of the statement of cash flows, under the heading "Net Increase Decrease in Cash and Cash Equivalents for the Period". Cash flow from operating activities reflects cash inflows and outflows from..."
Abstract This paper explains that, in cash basis or cash accounting, businesses record transactions only if they involve the payment or receipt of cash, which does a poor job of matching revenues earned with money laid out for expenses. The author points out that, in accrual accounting, the economic impact of a transaction is recorded whether or not the transaction involves cash, which does a better job of matching revenues with expenses and of handling items such as property and equipment. The paper relates that the four statements used in the accrual method accounting are the balance sheet, the income statement, the statement of cashflows and the statement of stockholders' equity.
From the Paper "An example would be a purchase of supplies in July but the supplies are not sold until August. You receive the cash in August. However, when the books are closed all you have to show for July is an expense for supplies but no revenue to offset it, meaning there is a loss for that month. This can make it difficult for a business to determine whether or not it is earning a profit because all its business activity does not always fall on the same month. It also has trouble tracking anything other than cash. For example if you purchased equipment or property the cash method of accounting would show the purchase and disbursement in the month of purchase. These items, however, will be used over a period of time."
Abstract This paper discusses the importance to a company of forecasting its cashflows. It begins by providing an explanation of what this entails and then describes the steps for a company to perform an efficient cashflow forecast. The paper concludes with examples of companies that managed to perform efficient cash forecasting and discusses the positive effects this had on these companies.
Table of Contents:
Introduction
Reasons To Forecast CashFlows How To Perform An Efficient Cash Forecasting
Success Stories
From the Paper "Compare cash forecasts to business plan outputs. By doing so, a company will take under consideration current business trends, rather than historical results. Usually, extrapolation based on historical results needs to be adjusted to all changes in the business environment. That is why comparing the cash forecasting results with those from the business plan can be useful. There is also the advantage of adjusting the results from the business plan to those from the cash forecasting by engaging the business units in this process, if the gap between the two methods is large."
"Last, but not least, the comparison is important to check the current business status against the forecasted results. This is particularly important for business units as they deal with the operational part of the company's activity and therefore are responsible for the operational results."
This paper is a research proposal on the risk and opportunities of working capital, working capital management, cash conversion cycle and credit management, among others.
Abstract This paper is a research proposal that discusses Lawrence Sports, a company that manufactures and distributes sports equipment and protective gear. Lawrence has a cashflow problem because its largest customer, Mayo Stores, is not paying on time. This paper benchmarks other companies to determine an alternative solution which will enable the company to improve its overall cashflows. The paper introduces research that assesses the risks and opportunities of working capital, working capital management, cash conversion cycle, credit management, and short-term financing/debt reduction to prepare for long-term opportunities, cashflow, and identifies the best practices in working capital management. Also, the paper has a large appendix with information from multiple companies.
Outline:
Abstract
Introduction
Conclusion
References
Appendices
Borders
General Electric
Magna Entertainment Corporation
Fleetwood Enterprise
Wal-Mart
Starbucks
Graham Manufacturing
Dell Computers
From the Paper "In addition to the other working capital issues identified, Lawrence Sports also is experiencing issues with its cash conversion cycle. Currently, Lawrence is using short-term financing in the form of cash from operations and a bank line of credit to not only finance short term assets such as inventory but also ongoing operations. Doing so places a significant pressure on the company to convert cash quickly. Benchmarking two other companies who have successfully controlled their cash conversion cycle could lend insights to Lawrence on how its CCC may be improved.
"Graham Manufacturing had a CCC of 134 days in 2004. By reducing the amount of time to collect 42% in 2007 and 37% in 2006 as well as increasing the amount of customer deposits prior to delivery of product Graham reduced its CCC down to 46 days by Q1 FY08. Following Graham's example Lawrence Sports could reduce its CCC by requiring Mayo, its largest customer, to pay more than 20% at the time of order. Additionally, Lawrence should focus on faster collections just as Graham did successfully. Such a plan could take the form of discounts for prompt payment or negotiate an interest charge for delayed payment."
This paper is a research proposal on the risk and opportunities of working capital, working capital management, cash conversion cycle and credit management, among others.
Abstract This paper is a research proposal that discusses Lawrence Sports, a company that manufactures and distributes sports equipment and protective gear. Lawrence has a cashflow problem because largest customer, Mayo Stores is not paying on time. This paper benchmarks other companies to determine an alternative solution which will enable the company to improve its overall cashflows. The paper introduces research that assesses the risks and opportunities of working capital, working capital management, cash conversion cycle, credit management, and short-term financing/debt reduction to prepare for long-term opportunities, cashflow, and identifies the best practices in working capital management. Also, the paper has a large appendix with information from multiple companies.
Outline:
Abstract
Introduction
Conclusion
References
Appendices
Borders
General Electric
Magna Entertainment Corporation
Fleetwood Enterprise
Wal-Mart
Starbucks
Graham Manufacturing
Dell Computers
From the Paper "In addition to the other working capital issues identified, Lawrence Sports also is experiencing issues with its cash conversion cycle. Currently, Lawrence is using short-term financing in the form of cash from operations and a bank line of credit to not only finance short term assets such as inventory but also ongoing operations. Doing so places a significant pressure on the company to convert cash quickly. Benchmarking two other companies who have successfully controlled their cash conversion cycle could lend insights to Lawrence on how its CCC may be improved.
"Graham Manufacturing had a CCC of 134 days in 2004. By reducing the amount of time to collect 42% in 2007 and 37% in 2006 as well as increasing the amount of customer deposits prior to delivery of product Graham reduced its CCC down to 46 days by Q1 FY08. Following Graham's example Lawrence Sports could reduce its CCC by requiring Mayo, its largest customer, to pay more than 20% at the time of order. Additionally, Lawrence should focus on faster collections just as Graham did successfully. Such a plan could take the form of discounts for prompt payment or negotiate an interest charge for delayed payment."
Abstract This paper examines why a company needs to have a good cashflow. It explains that to protect themselves from risk, businesses can use a wide range of sources of funds in order for them to be able to finance their trading activities. Although not all of them are in cash, the paper explains that they have the effect of improving cashflow on both short and long term; most sources of capital take the form of assets used by companies in order for them to function.
From the Paper "Budgeting is the process through which the resources and responsibilities of each center of activity are set. The budget is the prediction of the resources and expenses required in order for the objectives of the corporation to be fulfilled, respecting certain profitability conditions. The starting point may be last year's budget or, in some cases, Zero Budgeting may be employed (starting from scratch). Budgeting greatly increases the cash flow, if used correctly.
Manpower management is also an important method of improving cash flow. For instance, some workers do not require permanent contracts, work can be subcontracted or transferred to temporarily contracted workers, which has the effect of reducing expenses with pensions, insurance, holiday pay etc."
