scispace - formally typeset
Search or ask a question
Topic

Cash flow statement

About: Cash flow statement is a research topic. Over the lifetime, 4011 publications have been published within this topic receiving 117410 citations.


Papers
More filters
Posted Content
TL;DR: In this paper, the benefits of debt in reducing agency costs of free cash flows, how debt can substitute for dividends, why diversification programs are more likely to generate losses than takeovers or expansion in the same line of business or liquidationmotivated takeovers, and why the factors generating takeover activity in such diverse activities as broadcasting and tobacco are similar to those in oil.
Abstract: The interests and incentives of managers and shareholders conflict over such issues as the optimal size of the firm and the payment of cash to shareholders. These conflicts are especially severe in firms with large free cash flows—more cash than profitable investment opportunities. The theory developed here explains 1) the benefits of debt in reducing agency costs of free cash flows, 2) how debt can substitute for dividends, 3) why “diversification” programs are more likely to generate losses than takeovers or expansion in the same line of business or liquidationmotivated takeovers, 4) why the factors generating takeover activity in such diverse activities as broadcasting and tobacco are similar to those in oil, and 5) why bidders and some targets tend to perform abnormally well prior to takeover.

14,368 citations

Journal ArticleDOI
TL;DR: In this paper, the authors analyze a firm owned by atomistic shareholders who observe neither cash flows nor management's investment decisions and find that management is forced to invest too little when cash flow is low and too much when it is high.

3,687 citations

Journal ArticleDOI
TL;DR: The authors examine the determinants and implications of holdings of cash and marketable securities by publicly traded U.S. firms in the 1971-1994 period and find evidence supportive of a static tradeoff model of cash holdings.

2,590 citations

Posted Content
TL;DR: The authors examined the determinants and implications of holdings of cash and marketable securities by publicly traded U.S. firms in the 1971-1994 period and found that firms with strong growth opportunities and riskier cash flows hold relatively high ratios of cash to total assets.
Abstract: We examine the determinants and implications of holdings of cash and marketable" securities by publicly traded U.S. firms in the 1971-1994 period. Firms with strong growth" opportunities and riskier cash flows hold relatively high ratios of cash to total assets. Firms" that have the greatest access to the capital markets (e.g. large firms and those with credit" ratings) tend to hold lower ratios of cash to total assets. These results are consistent with the" view that firms hold liquid assets to ensure that they will be able to keep investing when cash" flow is too low relative to planned investment and when outside funds are expensive. The" short run impact of excess cash on capital expenditures, acquisition spending and payouts to" shareholders is small. The main reason that firms experience large changes in excess cash is" the occurrence of operating losses. There is no evidence that risk management and cash" holdings are substitutes.

2,581 citations

Book ChapterDOI
TL;DR: In this paper, the benefits of debt in reducing agency costs of free cash flows, how debt can substitute for dividends, why diversification programs are more likely to generate losses than takeovers or expansion in the same line of business or liquidationmotivated takeovers, and why the factors generating takeover activity in such diverse activities as broadcasting and tobacco are similar to those in oil.
Abstract: The interests and incentives of managers and shareholders conflict over such issues as the optimal size of the firm and the payment of cash to shareholders. These conflicts are especially severe in firms with large free cash flows—more cash than profitable investment opportunities. The theory developed here explains 1) the benefits of debt in reducing agency costs of free cash flows, 2) how debt can substitute for dividends, 3) why “diversification” programs are more likely to generate losses than takeovers or expansion in the same line of business or liquidationmotivated takeovers, 4) why the factors generating takeover activity in such diverse activities as broadcasting and tobacco are similar to those in oil, and 5) why bidders and some targets tend to perform abnormally well prior to takeover.

2,103 citations


Network Information
Related Topics (5)
Stock market
44K papers, 1M citations
80% related
Interest rate
47K papers, 1M citations
79% related
Volatility (finance)
38.2K papers, 979.1K citations
79% related
Earnings
39.1K papers, 1.4M citations
78% related
Corporate social responsibility
45.5K papers, 1M citations
78% related
Performance
Metrics
No. of papers in the topic in previous years
YearPapers
202346
2022127
202132
202047
201943
201868