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Title:Internationale Cash Flow-Rechnungen aus Eigner- und Gläubigersicht PDF Logo
Authors:Becker, Gernot M.
Seeger, Norbert
Issue Date:2003
Series/Report no.:Arbeitsberichte der Hochschule für Bankwirtschaft 48
Abstract: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 shareholder’s and a creditor’s 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 concept of the cash flow statement and discuss cash flow patterns of firms, cash flow ratios and their usefulness, but also the limitations the analyst should be aware of. In the second part we analyse the relevance of cash flow statements for banking institutions. Banks also have to present them in their annual accounts, but interestingly both investment and credit analysts make little use of them. We explore the peculiarities of the business model of banking, its impact on cash flow as well as the information needed for analysing the strategic liquidity of a bank. Based on our findings, we do not recommend investment and credit analysts to change their opinion on the usefulness of cash flow statements for banks.
Subjects:Cash flow statements for firms
cash flow statements for banks
cash flow analysis
shareholder value analysis
debtholder value analysis
credit analysis
analysis of accounting policy
JEL:M41
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008072200
Document Type:Working Paper
Appears in Collections:Frankfurt School - Working Paper Series, Frankfurt School of Finance and Management

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