A relatively simple way to analyse a company’s financial status is to examine the positive or negative signs of its cash flow patterns and to link certain characteristics to selected cash flow patterns. In this article, the frequencies of cash flow patterns in South African listed industrial companies are examined for a single financial period, as well as for three different cumulative periods, ending in 1993, 1996 and 2002 respectively. Mature companies, i.e. those with positive cash flow from operating activities, negative cash flow from investing activities and negative cash flow from financing activities, were identified as the most frequently occurring pattern during the selected periods. The study shows that the mature companies had the highest median amongst the more regular cash flow patterns, for the net profit percentage, for the cash flow from operating activities before the payment of dividends as a percentage of sales and for dividend payout. The study also reveals that companies in their growth phase had the highest medians for investment outflow, for sales growth and growth in total assets, for accounts payable and inventories. Start‐up companies had the highest medians for inflow from financing activities and for total debt to total assets.

Cash flow patterns in listed South African industrial companies

The Province of Alberta has been a participant in the Tax Collection Agreements (TCAs) with
the Federal Government covering the personal income tax since their inception in 1962. Under
the terms of this agreement, the Federal Government undertakes to collect the Alberta personal
income tax at no charge provided that the Government of Alberta agrees to levy its tax within a
commonly agreed framework.

This paper provides an assessment of the overall advantages and disadvantages for Alberta of participating in the Tax Collection Agreement for personal income tax. Its overall conclusion is that TCAs have worked very well in enabling Canadian governments to achieve their shared tax policy objective, while at the same time reducing tax complexity, duplication and cost, and promoting tax harmony. And the new more flexible TCA framework with its tax-on-income
option, the TCAs should work even better and be able to accommodate the legitimate tax policy objectives of provincial governments that were constrained by the old TCA, which required provinces to levy taxes on the federal basic tax rather than the tax base.

https://mpra.ub.uni-muenchen.de/21722/1/tca.alberta.pdf

A Separate Personal Income Tax Collection System For Alberta: Advantages and Disadvantages

In the present study, the impact of publishing more precise and better-structured cash flow information on financial analysts’ forecast will be examined . Even though the change in standards presently under study may be principally deemed to be cosmetic, it does appear to have allowed financial analysts to generate more accurate forecasts of future earnings. An increase in the dispersion of these forecasts, more especially when dealing with enterprises providing a high quality of earnings, is also noted.

/pdf/the-impact-of-cash-flow-information-on-the-forecasts-1impn6us4t.pdf

The Impact Of Cash Flow Information On The Forecasts Provided By Financial Analysts, Considering The Quality Of Earnings

Several mixed industry prediction models about failure have been reasonably successful in differentiating between successful companies and those that have failed. The challenge, however, is to venture into the grey area in between and to identify companies, which are financially unstable, at an early stage. Early identification enables management to intervene timeously in an attempt to prevent failure. Failure is defined as either liquidation, delisting, suspension of listing or a substantial change in structure. The grey area focused on in this study is overtrading. Overtrading is triggered by the company growing at too high a rate relative to its specific structure. Cash is necessary to fund expansion, whether for an increase in inventories, credit sales or new non-current assets. If the company does not generate enough cash to fund this expansion, it has to be financed through external sources. The longer the period of growth and the higher the growth rate, the more the cash requirements. From the theoretical model underlying overtrading, it was found that: • the higher the growth in sales, • the smaller the profit margin, and • the higher the net current assets in proportion to total assets, the lower the cash flow from operating activities before dividends were paid (CFO). Any company ought to generate enough cash from its daily activities in order to maintain the existing level of business, to repay loans, to replace assets and to pay dividends. If the internal generation of cash is insufficient to finance these activities, existing cash resources will be consumed, unproductive non-current assets will be sold and possibly also some of the productive non-current assets. The outcome for such a company is a business combination or liquidation. Due to the fact that cash plays such a big role in failure, cash flow variables constitute the majority of the independent variables used in the development of the failure prediction models. The overtrading ratio was developed as a measurement tool to quantify overtrading. As long as the company generates a positive CFO, it is not so much at risk as a company that does not succeed in generating a positive CFO. Therefore, a negative CFO for a three-year period was decided on as the norm for identifying possible

/pdf/die-gebruik-van-kontantvloei-en-winsgegewens-by-die-53y425ypz6.pdf

Dixon Gunn

Papers

The ins and outs of cash flow.

A tax on income