Showing papers on "Cash flow forecasting published in 2022"
TL;DR: In this article, the authors investigated the effect of the two main motivations for having precautionary cash holdings: to cover potential operating losses and to fund investments, and they found that a firm's cash-management dynamics can vary significantly depending on which of these two motivations is dominant.
6 citations
TL;DR: In this paper , a methodology for evaluating the effectiveness of investment projects that generate continuous cash flows, which are typical for the service sector and retail trade, has been developed and substantiated.
Abstract: A methodology for evaluating the effectiveness of investment projects that gen-erate continuous cash flows, which are typical for the service sector and retail trade, has been developed and substantiated. Models of discounted cash flow (DCF) for projects that generate continuous cash flows are obtained and presented. The use of models illus-trated with a concrete example are given. It is shown that in short-term projects, with a high cost of capital and, accordingly, a high discount rate, the net present value of the discounted continuous cash flow is significantly higher than the net present value of the cash flow obtained under the assumption of a discrete flow. In some cases, this may lead to errors in assessing the effectiveness of investment projects and errors in the se-lection of projects, since their implementation leads to cash flows that do not belong to the end of each period, as is assumed in well-known methods, but are distributed in the course of periods.
5 citations
TL;DR: In this article , the authors investigated the effect of the two main motivations for having precautionary cash holdings: to cover potential operating losses and to fund investments, and they found that a firm's cash-management dynamics can vary significantly depending on which of these two motivations is dominant.
5 citations
TL;DR: In this paper , the authors examine the role of cash holdings during crises, whether the firm with higher cash holdings could quickly recover the operating performance after the financial crisis. And they find that if a firm has higher cash holders, its operating performance recovers more rapidly after financial crisis; these results hold after accounting for endogeneity and various robustness tests.
Abstract: We examine the role of cash holdings during crises, whether the firm with higher cash holdings could quickly recover the operating performance after the financial crisis. We find that if a firm has higher cash holdings, its operating performance recovers more rapidly after financial crisis; these results hold after accounting for endogeneity and various robustness tests. Regarding possible transmission channels, we find that higher cash holdings increase capital expenditures and R&D expenditures, which improves firms' performance more rapidly after financial crisis. Furthermore, differences in financing constraints, corporate governance, and degree of financial development affect the relationship between cash holdings and post-crisis speed of recovery. Thus, firms should judiciously reserve cash holdings in their accounts to safeguard against unexpected emergencies.
4 citations
TL;DR: In this paper, the authors study the essence of the definitions "financial resources" and "cash" and clarify their common and distinctive characteristics, which is relevant from the point of view of optimizing management processes in financial management and establishing effective internal and external communications.
Abstract: The obtained results of theoretical research become the basis of the practical activities of enterprises and are the basis for the development of programs, projects, corporate and functional strategies of the enterprise. Therefore, a theoretical study of clarifying the essence of the concepts "financial resources" and "cash" is relevant from the point of view of optimizing management processes in financial management and establishing effective internal and external communications with the correct use of these concepts. The purpose of this scientific article is to study the essence of the definitions "financial resources" and "cash" and clarify their common and distinctive characteristics. The article discusses the concept of "resources" and their characteristics. Different approaches of scientists to the interpretation of financial resources, their features and differences are studied. The obtained results are systematized in a table highlighting the key meaning, which became: cash funds, cash resources, highly liquid assets, own and loan funds, target direction and sources of income (internal and external). The role of money in the financial and economic activity of the enterprise is determined. Cash is constantly deposited in bank accounts or cash registers in the form of proceeds from sales or income and is withdrawn when payments are made. Domestic scientists define cash as the receipt and outflow of monetary units of the enterprise and their equivalents, generated as a result of its economic activity, the movement of which is related to the factor of time, risk and liquidity. It has been proven that equating financial resources with money significantly narrows the concept of "financial resources", because they include not only available, but also potential funds. We consider it expedient to interpret "financial resources" as a set of cash and their equivalents, formed in the process of economic activity and received from the outside intended for the fulfillment of financial obligations and financing processes of the reproduction of the enterprise. It is established that cash is not the same as financial resources, but is only a part of them and is the most liquid asset of the enterprise, including cash in hand, funds on bank accounts in banks, deposits and electronic money. The given definition of financial resources of the enterprise reveals the main internal content of financial resources, according to which it becomes possible to identify the mechanism of the influence of finance on the reproductive process, which is a prospect for further scientific research.
3 citations
TL;DR: In this article , the authors provide an overview about how academic researchers have evolved about the usefulness of the Statement of Cash Flow and analyze the different stages of the research trends and the main topics.
Abstract: The International Financial Reporting Standard Foundation issued a new Conceptual Framework for Financial Reporting. According to this document, the general purpose of financial reporting is to provide financial information about the reporting entity which is useful to existing and potential investors, lenders and other creditors in making decisions related to raise resources for the entity. Focused on the Statement of Cash Flow analysis the main objective of this paper is to provide an overview about how academic researchers have evolved about the usefulness of this Statement. Firstly, we sought to find the best database to perform a bibliometric analysis on the sample identified about the Statement of Cash Flow research. Secondly, we analysed the different stages of the research trends and the main topics. As interesting results of the analysis we can highlight that the clusters in the bibliographic network match with the research lines identified and connections between the papers have been increasing further through networks. The research lines mentioned by the accounting regulators, who issued the cash flow standards, have mostly concluded that the Statement of Cash Flow is useful to fulfill those purposes together with the researchers.
3 citations
TL;DR: In this article , a BP neural network model based on the improved genetic algorithm is proposed to predict the free cash flow of enterprises, and the results show that the model has better prediction accuracy.
Abstract: Enterprises with good long-term free cash flow data often have better prospects than enterprises with good net profit but unstable free cash flow for a long time, and free cash flow prediction is an important part of evaluating the enterprise value of an enterprise. By determining the fitness function, algorithm formula, population, and Backpropagation (BP) neural network design, a BP neural network model based on the improved genetic algorithm is proposed to predict the free cash flow of enterprises. Taking the free cash flow data of G Company from 1 January 2019 to 30 June 2019 as an example, after evaluating the most neurons and the best population, analyzing the relative errors and comparing the average relative errors of different prediction models, the results show that the model has better prediction accuracy. Cash flow forecasting can effectively improve decision making on productions and operations and the investment financing of enterprises, and has important practical significance for studying enterprise fund management.
2 citations
TL;DR: In this paper , the authors used a deterministic cash flow model based on the formula of the cash flow statement according to which the total cash flow, i.e. net change in cash, is the sum of the operating cash flows, investment income minus investment expenditure, increased by financial income and reduced by financial expenditure.
2 citations
TL;DR: In this article , a grey-box model was proposed to capture the nonlinearity and the dynamics of cash flow model parameters, while their parameters were modelled as a black-box with a Padé approximant as a functional form.
Abstract: Abstract We propose a novel grey-box model to capture the nonlinearity and the dynamics of cash flow model parameters. The grey-box model retains a simple white-box model structure, while their parameters are modelled as a black-box with a Padé approximant as a functional form. The growth rate of sales and firm age are used as exogenous variables because they are considered to have explanatory power for the parameter process. Panel data estimation methods are applied to investigate whether they outperform the pooled regression, which is widely used in the extant literature. We use the U.S. dataset to evaluate the performance of various models in predicting cash flow. Two performance measures are selected to compare the out-of-sample predictive power of the models. The results suggest that the proposed grey-box model can offer superior performance, especially in multi-period-ahead predictions.
2 citations
01 Mar 2022
TL;DR: In this article , the authors investigate the determinants of corporate cash holdings using a robust regression technique (the Least Absolute Deviation Regression, LAD) and a state-of-the-art variable selection procedure (The LeAST Absolute Shrinkage and Selection Operator, LASSO).
Abstract: US firm cash holdings have become increasingly concentrated over time withering shareholder returns and heightening agency problems associated with free cash flows. We investigate the determinants of corporate cash holdings using a robust regression technique (the Least Absolute Deviation Regression, LAD) and a state-of-the-art variable selection procedure (The Least Absolute Shrinkage and Selection Operator, LASSO). This framework identifies a sparse model which is also resistant to outliers. We obtain several results. First, the median absolute errors of the LAD-LASSOselected variables is significantly lower than the corresponding values of the basic determinants commonly used in the literature, in both in-sample and out-of-sample schemes. Second, financial leverage is a key determinant of cash holdings, indicating that cash and debt policies are tightly related (debt-cash substitutability). Third, none of the corporate governance proxies identified in the literature as a corporate cash holding determinant (managerial ownership, board independence, CEO duality, board size, and institutional ownership) is selected by the LAD-LASSO method, challenging the potency of governance mechanism in corporate cash management. Fourth, the financial crisis of 2008 dramatically changed the selected predictors for cash holdings as well as requiring additional predictors for the period, though their number was heavily curtailed after the period. Fifth, the money demand function is different between financially constrained and unconstrained firms, in both combination and number of influential variables. Finally, prediction error of the LAD-LASSO-based cash model is smaller than that of the principal components regression in both in-sample and out-ofsample prediction. Our findings are of importance to corporate cash managers, shareholders, monetary policy authorities, and scholars on the issues such as adjustment speed of cash holdings and valuation of excess cash reserves, which are based on the fitted values from the cash model.
1 citations
TL;DR: In this paper , the authors take a closer look at the central bodies that have addressed this issue and illustrate what has been said about cash flow and the cash flow statement by the American FASB, the IASB and the Italian Civil Code.
Abstract: The financial analysis of a company, implemented through ratios alone, can lead to making completely erroneous judgements about the dynamic development of the company's income and expenditure. For this reason, cash flows and the statement that summarises them represent essential elements of the study of the company's financial performance. Various international bodies have addressed this issue since, in most countries, the cash flow statement now identifies one of the elements that make up the financial reporting for the year, on par with the balance sheet and profit and loss. Here we will take a closer look at the central bodies that have addressed this issue and illustrate what has been said about cash flow and the cash flow statement by the American FASB, the IASB, the Italian Civil Code and the Italian Accounting Standards Board. As you will see, all of these bodies propose structures or examples of items requiring the highlighting and re-grouping of needs and sources into three aggregates: operating activities, investing activities and financing activities. Subsequently, we will point out that information limitations characterise these statements.
TL;DR: In this paper , a comprehensive literature review on existing theories and cash management practices that are useful in decision making is provided, highlighting important theories including trade-off theory, transaction model, precautionary measures, financial hierarchy, and cash flow theory.
Abstract: Cash(liquidity) management is at the heart of a firm’s financial management. It is a silver lining between the bankruptcy and the success story of a company. Therefore, this study intends to contribute some insights into cash management practices and how firms can use them to achieve sound financial performance. This study provides a comprehensive literature review on existing theories and cash management practices that are useful in decision making. After the analysis of the available literature, the study highlights important theories including trade-off theory (TOT), transaction model, precautionary measures, financial hierarchy, and cash flow theory. Furthermore, management practices such as stochastic cash management model, speeding up cash collections, centralization & decentralization of management, asset portfolio diversification, and cash disbursement are discussed. The study suggests that a sound financial performance can be achieved through a hybrid approach and through adaptation and embracing innovations in cash management systems.
TL;DR: In this article , the authors used a multiple linear regression analysis model to predict the future cash flow of PT. Mulia Abadi and showed that Net Profit, Accounts Payable, Cash Turnover and Inventory Turnover have a significant effect on the Operational Cash Flow.
Abstract: The company's financial statements are the final result of accounting activities (accounting cycle) that reflect the financial condition and results of the company's financial operations. are outside (external) the company. Therefore, financial statements can be used as a tool to communicate with the parties with the company's financial data (The dan Sugiono, 2015). Users of financial information include: investors, employees, creditors, suppliers, governments and the general public. The company's published financial statements are an important source of information for investors and creditors to be able to analyze the work of management in making profits and cash flows in the future (Simangunsong, et al, 2018). Users of financial statements such as investors and creditors are more interested in what will happen in the future. The company's performance parameters of concern are the components of cash flow and profit. The cash flow statement is one type of financial statement that has the entity's ability to generate cash flows in the future, the cash flow statement can be used as a tool to predict the company's future cash flows.
Analysis of research data used in this study is multiple linear regression analysis model. Primary data were collected and obtained through observational interviews, documentation studies and literature studies, while secondary data were obtained from literature related to the research topic. The financial statements used as the object of research.
The results showed that Net Profit had no effect on the Operating Cash Flow of PT. Mulia, Accounts Payable has a significant effect on the Operational Cash Flow of PT. Mulia, Cash Turnover has a significant effect on the Operational Cash Flow of PT. Mulia, Inventory Turnover has no effect on the Operational Cash Flow of PT. Mulia Mulia Abadi and Net Profit, Accounts Payable, Cash Turnover and Inventory Turnover have a significant effect on the Operational Cash Flow of PT. Mulia.
TL;DR: In this paper , the authors proposed a methodology to calculate NPV, given the influence of variability in determining the cash flow from investing activities in terms of outflows, i.e. the required volume of investments to create new fixed assets.
Abstract: Subject. The article considers the variability of determining the cash flow of capital investments and methodology for calculating the net present value (NPV) of an investment project, taking into account the said variability.
Objectives. The aim is to propose a methodology to calculate NPV, given the influence of variability in determining the cash flow from investing activities in terms of outflows, i.e. the required volume of investments to create new fixed assets.
Methods. The study employs generally accepted scientific methods of information analysis and synthesis.
Results. I analyzed modern domestic and foreign approaches and methods for calculating NPV of an investment project, formulated the concept of cash flow of capital investments, offered my own methodology for its variable determination. The methodology for NPV calculation covers three scenarios of investment project implementation: baseline, optimistic and pessimistic. The paper includes the impact analysis of variability of the determination of cash flow of capital investments on NPV of investment project.
Conclusions. The paper defines the nature of the influence of variability in determining the cash flow of capital investments on the NPV of an investment project. The findings can be used to calculate and plan targeted indicators of investment performance (NPV), when evaluating and implementing investment projects, regardless of sources of financing.
TL;DR: In this paper , the authors investigate whether the cash discount for condos is affected by time on market (TOM) and show that the cash discounts have two components: first, condos purchased with cash sell at a discount compared to mortgage-financed condos.
Abstract: We investigate whether the cash discount for condos is affected by time on market (TOM). Theoretically and empirically, we show that the cash discount has two components: First, condos purchased with cash sell at a discount compared to mortgage-financed condos, which is in line with the cash discount identified in the housing literature. The second component is a TOM-variable cash discount that increases the longer a condo is on the market. In addition, our empirical analysis suggests the cash discount only exists for low-price condos and disappears in higher price segments. In particular, for low-price condos, the cash discount comprises of a 9.42% fixed cash discount and 0.1% per day TOM-variable cash discount. Our results suggest TOM represents an additional explanation for the cash discount in condos and moderates the relation between cash purchase and sales price.
TL;DR: In this article , the authors investigated the impact of financial leverage on corporate cash holdings in the Middle East and North African (MENA) emerging markets and found that leverage can be regarded as a substitute for holding a larger amount of cash and marketable securities.
Abstract: PurposeThis paper investigates the impact of financial leverage on corporate cash holdings in the Middle East and North African (MENA) emerging markets.Design/methodology/approachThe author applies the dynamic modeling approach to data from nonfinancial firms listed in 10 MENA countries between 2010 and 2019. The empirical model avoids the shortcomings of the prior literature by including indicators of the dynamics of the financial leverage to account for its persistence in the corporate cash holdings reserves.FindingsThis research reports a significant negative relationship between corporate cash holdings and financial leverage. The results support the pecking order model, suggesting that leverage can be regarded as a substitute for holding a larger amount of cash and marketable securities. The author argues that the negative relationship between financial leverage and corporate cash holdings reinforces the precautionary motive to have internal cash reserves rather than external debt to support capital and investment activities by firms in the MENA emerging markets.Practical implicationsThe results of this research provide important insights into cash and capital structure management for nonfinancial listed firms in the MENA emerging markets. Specifically, the paper will help managers to understand the dynamic financial leverage determinants of holding cash in corporations in the MENA emerging markets and encourage policymakers to financially determine the corporate capital structure and cash holdings based on cost and benefits. Managing the firm's capital structure and cash holdings based on trade-offs between costs and benefits would enhance operating cash flow which may play an important role in creating value for shareholders.Originality/valuePrior studies have commonly been concerned with the determinants of corporate cash holdings, but few have investigated the dynamic financial leverage determinants of corporate cash holdings. This paper draws attention to this issue within the context of MENA emerging markets. To the authors' best knowledge, this is the first study that explores the relationship between cash holdings and financial leverage in MENA emerging markets.
TL;DR: In this article , the authors examined whether internal corporate governance mechanisms are effective in curbing cash flow manipulation through real activities, misclassification, and timing, and found that corporate boards in India play an active role in managing real activities but fail to control the manipulation through misclassifications and timing.
Abstract: PurposeThe authors examine whether internal corporate governance mechanisms are effective in curbing cash flow manipulation through real activities, misclassification, and timing.Design/methodology/approachThe sample comprises of firms from an emerging market, India with data for years 2004 through 2015. The authors use the methodology given in Roychowdhury (2006).FindingsThe authors find that corporate boards in India play an active role in curbing cash flow manipulation through real activities but fail to control cash flow manipulation through misclassification and timing.Practical implicationsThe study suggests that corporate boards should pay more attention to the reported cash flow numbers. Regulators can reduce the opportunities available for cash flow misclassification by fixing relevant accounting and governance norms. Auditors can also help by critically focusing on the cash flow classifications presented by management.Originality/valueThis study, to the authors’ knowledge, is the first study that talks about the role of internal governance in a trade-off between different cash flow manipulation techniques.
TL;DR: In this paper , the authors investigate the role of country specific variables in the corporate cash holdings and their adjustment mechanism, and find that the overall financial development of a country has a significant impact on corporate stock holdings and cash adjustment dynamics.
Abstract: PurposeThe purpose of this study is to understand how the business environment of a country has an impact on cash management policies of the firms and also to investigate if there is any asymmetry in cash adjustment dynamics when a firm deviates from its long-term target of cash holdings.Design/methodology/approachUsing a sample of seven emerging Asian countries in the period 2001–2019, the authors investigate the role of country specific variables in the corporate cash holdings and their cash adjustment mechanism. They use the panel data regression method to estimate the results.FindingsThe authors find that the overall financial development of a country has a significant impact on corporate cash holdings and cash adjustment dynamics. When a firm has excess cash, the speed of adjustment towards the target is faster as compared to when it has deficit cash holdings. Further, when a firm holds excess cash, it adjusts towards the target using cash from investments; in case of deficit cash holdings, the adjustment happens via cash from financing activities.Practical implicationsThe results of the study are helpful to corporate managers as these are important references to them to understand and design cash management policies by considering factors that are measured at the country level. It also provides them a clearer understanding about the role of corporate board and information asymmetry in cash holdings.Originality/valueThis is the first study which examines the role of country-specific variables on corporate cash holdings and their adjustment mechanism of firms in emerging Asia. Further, the study extends the literature by providing new evidence that there is asymmetry in cash adjustment dynamics of firms after controlling for the overall financial development of a country.
TL;DR: Wang et al. as discussed by the authors provided a holistic, up-to-date, and thorough review of 172 journal articles on construction cash flow by applying a mixed review methodology using scientometric and systematic reviews.
Abstract: Cash is considered the most critical resource in construction projects. However, many contractors fail to obtain adequate liquidity due to a lack of proper cash flow management. Therefore, numerous research studies have been conducted to address cash flow-related issues in the construction industry. However, the literature still lacks a comprehensive review of cash flow management, methods and topics, in the construction industry. This study contributes by providing a holistic, up-to-date, and thorough review of 172 journal articles on construction cash flow. To achieve this primary objective, the study applies a mixed review methodology using scientometric and systematic reviews. The scientometric analysis provides the most contributing scholars, the timeline of cash flow research attention, and keywords clustering. On the other hand, the systematic analysis categorizes the cash flow themes, identifies current literature gaps, and highlights future research areas in the cash flow domain. The results show that cash flow analysis gained more research attention in the last two decades, cash flow-based schedule is the most frequent topic in the literature, and optimization techniques are predominant in the literature. Consequently, the study highlights five potential research frontiers. Further, an automated payment framework for modular construction projects using Blockchain-based smart contracts is developed to address some of the literature limitations. This study provides a guideline for future research efforts and raises researchers’ awareness of the latest trends and methods of construction cash flow analysis.
TL;DR: In this paper , the authors present a review of the models in the literature used for cash management, itself a component of working capital, to see if cash management models critical to working capital management are incorporated.
Abstract: Financial management is a complex body of knowledge that is still evolving without any successful template for its practice, especially in private firms. This paper reviews research on actual financial management in private firms to see if cash management models critical to working capital management are incorporated. The approach is to review all the models in extant literature used for cash management, itself a component of working capital. However, search results show that only Pugmire (1952) outlines the activities involved in actual financial management practice for local schools in the United States. He identified the generalizable constituents of the financial management process, including budgeting, accounting, auditing, records and reports, and cost analysis. The choice of cash as the review focus is because it is the essence of financial management in private firms: determining and sourcing capital as cash and utilizing it by allocation process to generate more cash and maximize the firm's value to stakeholders. Therefore, this paper contributes to financial management literature by extending Pugmire's (1952) template for public schools with cash management models in extant literature that can also be adapted for private firms, with potential for further research.
TL;DR: In this paper , the authors proposed a method to improve the quality of the data collected by the data collection system by using the information gathered from the database of the user's profile.
Abstract: У статті досліджено необхідність удосконалення на вітчизняних підприємствах відповідної роботи з обліково-аналітичного забезпечення управління грошовими потоками, адже їх всебічна оцінка є невід’ємною складовою управлінської роботи. Висвітлено особливості обліково-аналітичного забезпечення грошових потоків та напрацьовано конкретні шляхи удосконалення обліково-звітного процесу з наступним включенням отриманих даних до інформаційної системи фінансової оцінки та управління бізнесом. Виокремлено та проаналізовано роль і місце обліково-аналітичного забезпечення серед етапів управління грошовими потоками, шляхом структурування процесів формування управлінської інформації про рух грошових коштів та виділення його окремих стадій. Чітко визначено, що дотримання алгоритму управління грошовими потоками безпосередньо залежать від обліково-звітної системи, яка складає інформаційну основу для генерування управлінських рішень. Обґрунтовано доцільність започаткування на підприємствах практики складання бюджетів грошових потоків, що дозволить контролювати платоспроможність суб’єкта на кожну звітну дату, визначати напрями та доцільність використання як власних, так і залучених грошових коштів, своєчасно виявляти негативні тенденції з грошовими операціями. Визначено, що завдяки застосуванню бюджетування та фінансового контролінгу за грошовими потоками досягається удосконалення обліково-аналітичного забезпечення управління ними. Доведено, що цьому процесу сприятимуть заходи з повної автоматизації бухгалтерського обліку, застосування програмного забезпечення та відповідних інформаційних технологій обробки економічних даних за регульованими параметрами під запити управлінського персоналу. Запропонований перелік оціночних показників для аналізу грошових потоків підприємства сприяє кращому розумінню його фінансового стану. Розкрито підходи до проведення даного аналізу із застосуванням варіантів розрахунків як за розширеним, так і експрес-аналізом, які дають можливість повною мірою оцінити грошові потоки підприємства. Узагальнено фактори, завдяки яким відбувається поліпшення обліково-аналітичного забезпечення процесу управління грошовими потоками та які впливають на загальне виконання завдань стратегічного управління.
TL;DR: A website-based information system is a technological tool that helps users manage data on a small and medium-to-large scale by providing precise and accurate information as mentioned in this paper . But, the level of supervision of outgoing funds is relatively low and the risk of losing report data or reporting data damage due to activity occurs every day and sometimes accidentally.
Abstract: A website-based information system is a technological tool that helps users manage data on a small and medium-to-large scale by providing precise and accurate information. PT. Haleyora Power is one of the companies engaged in the electricity supply industry, which currently processes petty cash funds still using written records in books and the Microsoft Excel application. The level of supervision of outgoing funds is relatively low, and the risk of losing report data or reporting data damage due to activity occurs every day and sometimes accidentally. To minimize this, petty cash management can be implemented in the form of a website-based application through a petty cash system that includes petty cash receipts, petty cash disbursement procedures, and petty cash reports. In this case, the waterfall method is very suitable for creating a petty cash system as needed. The petty cash system created can make the procedure for disbursing petty cash funds more structured and provide convenience in data processing so that the reporting process at PT becomes better. Haleyora Power.
20 Oct 2022-Scientific Papers of the University of Pardubice. Series D, Faculty of Economics and Administration
TL;DR: In this paper , the authors investigated the impact of intercompany determinants on corporate cash holdings in South East Europe and found that SEE companies' cash holdings on average are 6.94% of the total assets, which is lower than in developed countries.
Abstract: This paper investigates the impact of intercompany determinants on corporate cash holdings in South East Europe. We researched a large sample of companies listed on the stock exchanges. We found that SEE companies’ cash holdings on average is 6.94% of the total assets, which is lower than in developed countries. Intercompany determinants have a significant impact on the company’s cash holdings. Our results suggest that cash holdings are positively affected by the size of the firms, cash flow, cash flow uncertainty, debt maturity, and growth opportunities. Cash holdings are negatively affected by the net working capital, financial leverage, and capital expenditures. SEE companies operate in underdeveloped financial markets with limited access to finances, and their cash holding decisions are mostly determined by the transaction motive. Our findings indicate that companies in SEE do not pursue a cash optimization policy. They largely follow the pecking order pattern and the cash holding of the firm is mostly determined by means of the relationship between the capital investments and internally generated funds.
16 Dec 2022-International Journal of Academic Research in Accounting, Finance and Management Sciences
TL;DR: Wang et al. as discussed by the authors conducted a bibliometric analysis and filled this literature gap by identifying and evaluating the current status and developing trends of the cash holdings domain to provide meaningful insights and assist in further discussion.
Abstract: Cash holdings are becoming a growing issue for worldwide scholars in finance to understand the importance of the strategic approach of corporate cash policy of cash reserves. In practice, firms have faced challenges in adopting an appropriate corporate cash holdings policy. It would be appropriate to study the notions of cash holding (CH) to explore suitable strategies to overcome the inadequacy of financial policy of cash reserves in the financial system worldwide. Thus, this paper aims to conduct a bibliometric analysis and fill this literature gap by identifying and evaluating the current status and developing trends of the cash holdings domain to provide meaningful insights and assist in further discussion. Bibliometric studies have proven to be beneficial in helping researchers better exploring the current research trends in a particular field of research. From Scopus database, this study identifies the knowledge evolution trend in the field of cash reserves or cash holdings, where 1,073 published articles from year 1971 to 2022 were reported. The current study's findings demonstrate that the number of publications in the domain of cash holdings has intensified in the past few years. The results also identify that Economics, Econometrics, and Finance were the more popular subject categories in the field of cash holdings from the past few decades. In terms of keyword analysis, the most frequently used keyword by authors associated with cash holdings are corporate governance and financial constraints. Moreover, co-authorship with researchers finds that most collaboration has taken place among United States, China, and the United Kingdom. Finally, citation analysis reveals the Journal of Corporate Finance dominates this field of research. Future strings of research should focus on the cash holdings and financial constraints, investment and external drivers that have an effect on cash holdings.
09 May 2022
TL;DR: In this article , the authors present the analysis of the accounting information system for cash sales and cash receipts on internal control at PT Sumber Alfaria Trijaya and conclude that the analysis is still not good and weak because there are several problems including the existence of multiple functions by the Assistant Head of the store, cash is not directly deposited to the Bank, and there is also no periodic or sudden checking of cash balances by internal control.
Abstract: Sales accounting information system and cash receipts is one of the sub-systems in accounting information that describes the correct procedures for sales and cash receipts activities. The problem in this study is how to implement a sales information system and cash receipts at PT Sumber Alfaria Trijaya. The type of research used by researchers in the preparation of this study is a qualitative method. The data used in this study is primary data. Data collection procedures are observation, documentation and direct interviews to the object of research. The conclusion of this study is the application of accounting information systems in cash sales and cash receipts at PT Sumber Alfaria Trijaya is still not good, seen from the dual function, namely the delivery function which doubles as a warehouse function and the lack of data and completeness. The analysis of the accounting information system for cash sales and cash receipts on internal control at PT Sumber Alfaria Trijaya is still not good and weak because there are several problems including the existence of multiple functions by the Assistant Head of the store, cash is not directly deposited to the Bank. In the cash function bill, and the amount of cash receipts from cash sales deposited in the bank on the third day not on the day of the transaction. Then there is also no periodic or sudden checking of cash balances by internal control.
14 Jun 2022
TL;DR: In this paper , a cross-sectional, time series regression model was used in each of the three parts of this study to predict future cash flow of 454 firms for the ten-year period from 1976-1985.
Abstract: In Statement of Financial Accounting Standards No. 95, "Statement of Cash Flows," the Financial Accounting Standards Board requires a statement of cash flows in place of a statement of changes in financial position. This information is assumed to be useful in predicting future cash flow. The first part of this three-part study empirically tests this assumption by comparing the abilities of three operating funds flow measures (working capital, net quick assets, and cash) to predict future cash flows. The second part of this study determines whether the reporting concept best for predicting future cash flow is dependent upon industry classification. The third part examines whether differences in the abilities of the three operating funds flow measures to predict future cash flow are affected by differences in the components of the current assets and current liabilities of a firm. Data for 454 firms were obtained from Compustat for the ten-year period from 1976-1985. Variables examined in the study included the three operating funds flow measures as independent variables and one dependent variable, future cash flow from operations. A cross-sectional, time series regression model was used in each of the three parts of this study. In the first part, each independent variable was tested by using all of the firms in three separate regression analyses. In the second part of the study, the firms were grouped according to industry classification. Each industry was tested with three separate regression analyses. In the third part of the study, the firms were grouped by cluster analysis according to similarities in the composition of their current assets and current liabilities. The resulting four clusters were each tested separately by using three regression analyses. Results of tests of the first part of this study indicated that working capital from operations is the best predictor of future cash flow. Results of tests of the second part of this study indicate that the effectiveness with which each of the operating funds flow measures predicts future cash flow varies across industries. Results of tests of the third part of this study were inconclusive.
22 Mar 2022
TL;DR: In this paper , the authors recommend using the cash flow to drive the balance sheet and use a mismatch between the Cash Flow Statement and the Balance Sheet to determine how assets, liabilities, and shareholders' equity are being affected.
Abstract: There are two common methods used when modeling financial projections: balance sheet drives the cash flow statement and cash flow statement drives the balance sheet. Although both methods are utilized often, the authors strongly recommend the second method, using the cash flow to drive the balance sheet. With the proper understanding that balance sheet line items increase or decrease based on how cash is sourced or spent, it is easy to understand that an unbalanced balance sheet occurs when there is a mismatch between the cash flow statement and the balance sheet. The key to thinking about balance sheet projections is the cash flow statement. Cash flows affect assets, liabilities, and shareholders’ equity items. The authors look to the cash flow statement to help determine how assets, liabilities, and shareholders’ equity are being affected.
TL;DR: In this paper , the authors investigated the essence of cash flow management, the main goal and objectives of such management, as well as its main stages, taking into account the main directions and problematic aspects of the issue under study.
Abstract: Today the need for financial planning is realized by most managers of enterprises, but in spite of this, the problem of building an effective model of enterprise cash flow management takes an important place in the financial policy of the Ukrainian economy. In today's market economy, cash flow is an integral part of the livelihood of the object of management. Poor quality of cash flow management is the main reason of insufficient level of liquidity, cash gaps and violations of the terms of payments and use of external sources of financing. The financial strategy is the foundation of the company's cash management process. An effective cash flow management strategy helps to ensure the rhythm of the operating cycle and increase profits, which maintains the stable financial condition of the company. The process of developing a cash flow management strategy predetermines the need to form specific financial development goals of the enterprise. The objectives of the financial development of the enterprise should ensure the implementation of the mission and objectives of its strategy, on the one hand, and support the objectives of other functional strategies and strategies of business entities, on the other hand. That is why the paper investigated the essence of cash flow management, the main goal and objectives of such management, as well as its main stages. In addition, the main strategies of the basic development of the enterprise were considered. Also, the article developed a cash flow management strategy, taking into account the main directions and problematic aspects of the issue under study.
TL;DR: In this paper , a Community Service will be carried out by providing technical guidance to small business actors, where actors will be given prior knowledge of accounting science, the importance of accounting in a business, as well as financial reports, especially cash flow reports.
Abstract: Cash flow statement is an important report for every company. Cash flow is described as cash inflows and cash outflows. Cash flow statements are often used to describe the company's ability to meet operating costs and company obligations, so that in order to generate additional profits, the company must have cash to reinvest. Broadly speaking, the cash flow statement consists of three activities, namely operational activities, investing activities and financing activities. Each of these activities has its own role in the cash flow statement. The focus of problems faced by small businesses in general is not making bookkeeping, so they do not prepare financial reports including cash flow statements. This will cause the business process to falter and even go bankrupt. In addition, bookkeeping can be useful for knowing the company's financial condition, avoiding fraud, and can also help in making decisions.This Community Service will be carried out in Kerinjing village. This activity will be carried out by providing technical guidance to small business actors, where small business actors will be given prior knowledge of accounting science, the importance of accounting in a business, as well as financial reports, especially cash flow reports. Then they will also be given technical guidance on how to prepare a cash flow statement, and will be given assistance in preparing a cash flow statement for their business.