Ch.2 Techniques of Financial Analysis

8/12/2019 Ch.2 Techniques of Financial Analysis

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Financial Management

Unit 2 Techniques of Financial Analysis:

Meaning, Nature, Objectives and limitations of financialanalysis. Tools of analysis and interpretation,, fund flow

statement analysis ( Working capital basis) ,Cash flow

statement analysis – (Cash basis) ,Ratio analysis

(Interpretations of ratios only) (8+2)HBPS case:

West Jet Airlines- Investment Strategy on 1st and 2nd Unit.

Lowe’s Companies Incorporation



FINANCIAL MANAGEMENT

Introduction:

Financial Management studies aboutthe process of procuring and judicious

use of financial resources with a view

to maximizing the value of the firm

there by the value of the owners.



Functions of Finance

In modern sense it can be broken down

into three major decisions as functions

of finance:a. The Investment Decision

b. the Financing Decision

c. the Dividend Policy Decision.



FINANCIAL STATEMENT

A financial statement is an organized

collection of data according to logical and

consistent accounting procedures. Its purpose is to convey an understanding of

some financial aspects of a business firm.

FS are also called as Financial Reports/Financial Information



Functions of Financial

Statements Financial Statements (FS) serve important functions:

FS provide information on how the firm has

performed in the past and what is its current financial

position. FS are a convenient device for the stakeholders (i.e.

shareholders, creditors, regulators and others) to set

performance norms and impose restrictions on the

management of the firm. FS provide useful templates for financial forecasting

and planning.



OBJECTIVES OF FINANCIAL STATEMENT

The objective of financial statements is to provide

information about the financial position, performance and

changes in financial position of an enterprise that is useful

to a wide range of users in making economic decisions.

To meet the common needs of most users. Providing information for economic decision:

Providing information about the financial position.

Providing information about performance of an enterprise. Providing information about changes in financial position.



Assumptions of Financial Statements/

Concept used in Financial Statement

Separate Entity Concept:

According to this concept the company (business) isconsidered as a separate legal entity from itsshareholders or stakeholders.

Double Entry:

This concept states that every transaction has

minimum two effects. The receiving and givingeffect.

Principal of Double Entry System

Every debit has corresponding credit and



Assumptions of Financial

Statements:

Going Concern: It is assumed that accounts are drawn up on the basisthat enterprise will continue in operational existence for the foreseeablefuture. This is important assumption for valuation of assets. The value ofthe assets are taken to be based on what they cost with adjustment in theform of depreciation for fixed assets which have been declining in valueover a period of time.

Accrual basis: Profit = Revenue – Expenses.

The process of matching is an attempt to ensure that revenues recorded ina period are matched with the expenses incurred in earning them.

Revenues are recognized at the point of sale ( when they are earnedusually at the date of a transaction with a third party), and not when

collected and expenses when they are incurred rather than when actually paid.. The costs of running the business should not be treated as a flow ofcash.



Characteristics of Financial Statements

Understandability: understand by users

Relevance: useful and relevant to decision making needs of users.

Materiality: nature of information. materialistic

Reliability: information must be reliable, free from errors and bias.

Substance: presented& accounted with substance and eco reliability.

Neutrality: free from bias

Prudence: assume losses but no overstating profits.

Completeness: complete within the bound of material and cost.

Comparability: to compare trends in financial position and performance

through time.



Forms of Consistency:

While preparing financial statements the following form of

consistency are taken into consideration. Vertical Consistency: It is achieved when the same accounting

policies, methods and practices are adopted while preparing

interrelated financial statements of the same date.

Horizontal Consistency:It is achieved when the same entity adopts the same accounting

policies, methods and practices from year to year.

Third Dimensional Consistency:

It is the consistency in accounting policies, methods and practicesfollowed by different units in the same industry.



Types of Financial Statements:

Income Statement: Prepared vertically or

horizontally as per statue.

Balance Sheet : The Companies Act 1956 stipulates

that the Balance Sheet of a joint stock company

should be prepared as per Part I of Schedule VI ofthe Act. Prepared vertically or horizontally as per

statutory provisions.

Statement of Retained Earnings Fund Flow statement

Cash Flow statement

Schedules





Limitations of Financial Statements:

Net profit/loss is ascertained on historical cost basis.

Actual profit can be ascertained only after the firm achieves itsmaximum capacity.

Fails to disclose quality of product, management efficiency etc.

Balance sheet shows past positions of the company and not

present and future.

The net income disclosed is only relative and not absolute.

Use of FS are limited in decision making by management,

investors, creditors etc. FS cannot be formed as a reliable basis basis of judgement as FS

are based on accounting policies which may vary from company

to company.



Financial Statement Analysis:

It means study of relationship among

various factors in a business as disclosed by

financial statements of a firm. It shows the

trend of the factors and will help in

evaluation of component parts. It is done to

obtain a better insight into a firm’s position

and performance.



Objectives of Financial Statement

Analysis:

To judge the financial health of the firm.

To evaluate the profitability of the

enterprise. To gauge the debt servicing capacity of the

firm.

To understand the long term and short termsolvency of the firm.

To know the return on capital employed or

invested.



Types of Financial Statement Analysis:

External Analysis: It is done by the outside agencies likeinvestors, financial analysts, lenders, government agencies,research scholars etc.

Internal Analysis: The management is interested in theanalysis of financial statements for measuring theeffectiveness of its own policies and decisions.

Horizontal Analysis: It is done for finding the trend ratiosand in comparative financial statements. When evaluation isdone for several years simultaneously at a time for makingconclusions, it is called horizontal analysis.

Vertical Analysis: It is the study of quantitativerelationship of one financial item to another based onfinancial statement on a particular date. For eg. Ratioanalysis, Common size statement.



Types of Financial Statement Analysis

Long Term Analysis:

The objective of long term analysis is to determinewhether the earning capacity of the firm is sufficientto meet the targeted rate of return on investment,

and is adequate for future growth and expansion of business. It is done to evaluate long term solvency, profitability, liquidity, financial health, earningcapacity of the firm etc.

Short Term Analysis:

It is done to determine the liquidity position of thefirm and short term solvency of the firm. The

analysis is oriented on efficiency of working capital



Methods of Analyzing Financial Statements:

Comparative Financial Statements:CFS are statements of financial position of a

business designed to provide time perspective to the

consideration of various elements of financial position embodied in such statements.

It includes :



Comparative Financial Statement

(Income and Balance Sheet)

It reveals :

absolute data (money value or rupee value),

Increase or reduction in absolute data in terms of

money values Increase or reduction in absolute data in terms

percentages,

Comparison in terms of ratios, Percentage of totals

Inter firm comparison (means two or more firmsfinancial statements are compared for drawinginferences)



Common Size Financial Statements

Common Size Financial Statements are percentage conversion

of Financial Statements i.e. P& L accounts and Balance Sheet to

establish each element to the total figure of the statement.

Useful to analyse the performance of the company

It includes1. Common size Income Statement: In this the sale figure is

taken as ‘100’ and all other figures of costs and expenses are

expressed as percentage of sales.

Profit = Sales – (cost + other expenses). It reveals theefficiency of the firm in generating components of cost as

proportion to sales. Inter firm comparison of common size

income statement reveals the relative efficiency of costs

incurred.



Common Size Financial Statements

2. Common Size Balance Sheet: In this the total ofasset or liability side is taken as ‘100’ and all figures

of assets and liabilities, capital and reserves are

expressed as proportion to the total i.e. 100. It

reveals the proportion of fixed assets to current

assets, proportion of long term funds to current

liabilities; inter firm comparison, financial health

and long term solvency of the firm etc.



TREND RATIOS

Trend Ratios: are the index numbers of the movements of

reported financial items in the financial statements which are

calculated for more than one financial year. Trend ratio help in

making horizontal analysis of comparative statements. It reflects

the behavior of items over a period of time.

Computation of trend ratio:

1. Follow accounting principles and policies consistently

throughout the period for which trend ratios are calculated.2. It is calculated only for the item having logical relationship

with one another.

3. It should be made at least for 4 consecutive years.



TREND RATIOS

One years financial statement should be selected as

a base statement and financial items of it should beassigned with value as 100.

Following formula is used to calculate trend ratiosof subsequent years:

= Absolute figure of financial statement under study X 100

Absolute figure of same item in base financial statement

Tabulate the trend ratios for analysis of trend over a period.



Ratio Analysis



RATIO

Ratio: A ratio is an arithmetical relationship between two

figures.

Ratios are relative figures reflecting the relationship

between related variables.

Ratio analysis is defined as the systematic use of ratio tointerpret the financial statements so that the strengths,

weaknesses, historical performance and current financial

condition of the business can be determined.

Financial ratio analysis is a study of ratios between various

items or groups of items in financial statements.



PURPOSE/USES OF RATIO Financial ratios are used to compare the risk and return of different

firms in order to help equity investors and creditors make intelligentinvestment and credit decisions.

Enable comparison of the performance of the company

- in different years

- with its budgets and forecasts

- with other companies in similar trades (inter firm comparison).

Provide information of the company in respect of the liquidity,

profitability, use of assets and capital structure

Eliminate the effects of the scale and size of different companies or

different years of the same company so comparison can be provided.

Appraise the performance of the company, make predictions for future

performance and assist in future planning



Purpose/Uses of accounting ratios

To identify aspects of a business’s performance to aid decision making

Quantitative process – may need to be

supplemented by qualitative factors to geta complete picture.

Ratios can be classified into liquidity,

capital structure or leverage , profitabilityand activity. The firm uses these ratios as

per the requirement in decision making.

Areas or T pes of Ratios



Areas or Types of Ratios

1. Liquidity – the ability of the firm to pay its way.

2. Profitability – how effective the firm is at generating profits given sales and or its capital assets.Investment/shareholders – information to enabledecisions to be made on the extent of the risk and the

earning potential of a business investment. Financial – the rate at which the company sells its stockand the efficiency with which it uses its assets.

3. Activity/Turnover /Efficiency / Asset Management

Ratios - are concerned with efficiency in assetmanagement. It is a test of relationship between sales orcost of goods sold and assets.

4. Solvency/Capital structure or Leverage ratios –

information on the long term solvency of a firm.



Accounting ratios and interpretation

I . LIQUIDITY:

Liquidity is a measure of the amount of funds a company can quickly

use to settle its debts.

It Measure the ability of a firm to meet its short term obligations and

reflect its short term financial strength or solvency.

Following are the important liquidity ratios:

1. current ratio / working capital ratio

2. acid test ratio / quick ratio / liquid ratio

3.

stock turnover rate4. stock turnover period

5. debtors’ collection period

6. creditors’ payment period



Liquidity – Current ratio Current ratio is the ratio of total current assets to total current

liabilities.

This ratio indicates the ability of a business to meet its short-termliabilities from its current assets.

It is also known as solvency ratio as it indicates how currentobligations are covered by current assets.

The ratio indicates the proportion of CA to meet CL.

The norm or standard ratio is 2:1.

If the ratio is too high, the company may be holding too many idleshort-term assets. (They may be used in a more profitable way.)

The excess investment in CA results in decrease in profitability dueto blocking of large funds in working capital.

If the ratio is too low, the company may not have sufficient fundsto meet its short-term liabilities.



Liquidity – Current ratio Formula : Current ratio = Currents Assets/Current Liabilities

Current Assets means assets which have been purchased to convertthem into money or cash within a short period of time i.e. a year.

Current assets includes Cash, Bank balance, Debtors, B/R,Inventories (stock), A/c Receivables, short term investments, shortterm loans, and prepaid expenses.

Currents Liabilities means liabilities with a short term period i.e. upto one year.

Currents Liabilities includes creditors, A/c payables, Bills Payable(B/P), Bank overdraft, provision for taxation, outstanding expenses,unclaimed dividend, short term loans, o/s interest, advance paymentreceived , debt of less than a period of one year.



Liquidity – Acid test/Quick ratio

This ratio indicates the ability of the business to meet its

short-term liabilities from its quick assets.

This ratio is a better tool to measure the ability to meet day

to day obligations.

It represents the ratio between quick current assets and thetotal current liabilities excluding bank overdraft.

The norm is 1:1.

If the ratio is too high, the company may be holding

excessive liquid assets.

If the ratio is too low, the company may have a liquidity

problem / cash flow problem.



Liquidity – Acid test/Quick ratio

Formula : Liquid ratio = Current Assets- Stock – Prepaid

expenses/ Current Liabilities – Bank Overdraft

Liquid assets includes Cash, Bank balance, Debtors, B/R,

A/c Receivables, short term investments, short term loans.

Liquid Liabilities includes creditors, A/c payables, BillsPayable (B/P), provision for taxation, outstanding expenses,

unclaimed dividend, short term loans, o/s interest, advance

payment received , debt of less than a period of one year.



Liquidity – Super Quick ratio

Super Quick ratio or absolute liquid ratio or cash

position ratio consider only cash in hand and at bank and marketable securities i.e. short term

investments in current assets.

The optimum value for this ratio should be 1:2. Ifratio is less than one it indicates company’s day to

day cash management is poor.

Formula :

Super Quick ratio = cash + marketable

securities/Current Liabilities



Liquidity – stock turnover rate

It shows the number of times that a business

can sell its average stock in a period.

A high ratio means high sales, fast stock

turnover and a low stock level.

A low ratio means low sales, low stock

turnover and a high stock level. (goods may

become obsolete, high storage cost)



Liquidity – debtors collection

period

This ratio measures the debt collection

period of a business.

A low ratio means debtors pay back their

debts in a short period of time. The

company may have sufficient liquid fund.

A high ratio indicates a poor credit control

and a high risk of bad debts.



Liquidity – creditors payment

period

This shows the length of time taken to pay

the creditors.

A long payment period may indicate that

the company has a liquidity problem. The

relationship between the company and the

suppliers may be affected.



A i i d i i



Accounting ratio and interpretationII. PROFITABILITY ratios related to sales:

1. Gross profit or margin ratio= Gross profit/net sales X 100

Gross profit = Sales- Cost of goods sold

Net sales = Gross Sales- Sales return

2. Net profit ratio= Net Profit or Earning After Tax/ Net sales X 100

3. Operating Net Profit ratio

= operating net profit or PBIT or EBIT / Net sales X 100

Operating net profit= Net Profit + Non operating expenses-non operating income

OR Gross profit- Operating expenses

4.Cost of goods sold ratio= Cost of goods sold / Net sales X 100

5. Operating Ratio = Cost of goods sold+ Operating expenses or EBIT / Net salesX 100

(Non operating income and expenses are excluded from above ratio)

6. Operating Expenses ratio = Administrative exp + Selling & Distribution

expenses / Net sales X 100

7. Selling Expenses ratio = Selling expenses / Net sales X 100



Profitability – gross profit ratio

It shows the gross profit on sales.

A low ratio means the stock is being sold at

lower prices. It may be a policy to stimulate

sales.

A high ratio may not result in high gross

profit figure unless a large volume of sales

is achieved.



Profitability – net profit ratio

It shows the net profit as a percentage of

sales.

It gives some ideas of the company’s

pricing policy and cost control.

A low ratio may be the result of lower

selling prices or higher operating costs.



Profitability – return on capital employed

This ratio shows the profitability of a

business and the management effectiveness

in terms of the use of capital.

A higher ratio means a higher profitability

and a better management efficiency.



Capital employed (Sole trader)

Closing capital

Average capital

Capital balance + long term loans



Capital employed (Partnership)

Closing balance on fluctuating capital accounts

Average of opening and closing balances on thefluctuating capital accounts

Total of fixed capital accounts plus total of currentaccounts

Average of fixed capital accounts plus total ofcurrent accounts

Any of the above plus long term loans to the partnership

C i l l d



Capital employed

(Limited company)

- total assets

- long term suppliers of capital (ordinaryshares + preference shares + reserves +

long-term loans) - shareholders’ capital (ordinary shares +

preference shares + reserves)

- shareholders’ equity (ordinary shares +reserves)



Return

Net profit after tax and preference share

dividends (for ordinary shareholders)

Net profit after tax + any preference share

dividends + debenture and long-term loan

interest (for all long-term suppliers of

capital)



Profitability – assets turnover

This indicates the efficiency of the business

in using its assets to generate revenues.

A higher ratio means the company is more

efficient to use its assets to generate

revenues. This results in higher profitability.

A ti ti d i t t ti




III. Activity/Turnover /Efficiency / Asset Management Ratios:

These ratios are concerned with measuring the efficiency in asset management. Turnover or activity ratios are a test of relationship between sales/Cost of

goods sold and assets.

First it indicates number of times inventory is replaced during the year or

how quickly the goods are sold.

The second category of turnover indicates the efficiency of receivables

management ands how quickly trade credit is collected.

Total asset turnover reveals the efficiency in managing and utilizing the total

assets.

Depending upon type of asset activity ratio may be- Inventory or stock turnover ratio

- Receivable or debtors turnover ratio

- Total asset turnover ratio



A ti ti d i t t ti



Accounting ratios and interpretationFormulas:

1. Working capital turnover ratio = Cost of goods sold/Sales

average net working capital

2. Raw material turnover = Cost of raw material used

Average raw material inventory

3. Work in process turnover = Cost of goods manufactured

Average work in process inventory

4. Finished goods inventory turnover = Cost of goods sold/Sales

Average finished goods inventory

5. Debtors turnover ratio = Credit sales / (Average debtors +Avg. B/R) or

accounts receivables.

The higher the ratio, lower is the collection period.

The lower ratio indicates higher collection period.

A ti ti d i t t ti



Accounting ratios and interpretationFormulas:

6. Average collection period (days) =Months or days in a year i.e.365 days

Debtors turnover ratio

7. Total Assets turnover = Cost of goods sold/Sales

average total assets

8. Fixed assets turnover = Cost of goods sold/Sales

average fixed assets

Note: If cost of goods sold is not available , sales figure is

used in the numerator.

A ti ti d i t t ti




IV. Solvency/Capital structure or Leverage

ratios:

Solvency refers to the capacity of the business to meet

its short term and long term obligations.

It shows light on Long-term solvency and stability.

There are two types of such ratios:

1. Debt equity or Debt Asset ratio

2. Coverage ratios

Long term sol enc Debt ratio



Long-term solvency – Debt ratio Debt to total asset ratio :

Total debts= Total assets X 100%

Debt ratio shows the total amount of liabilities to total assets.

If the debt ratio is too high (more than 50%), it is difficult toobtain further financing and it also has a heavy burden of

interest expense.



Gearing ratio

Gearing ratioPrior charge capital

= --------------------------------------- X 100%

Total capitalPrior charge capital = preference shares + long term loans

Total capital = ordinary share capital + reserves +

preference shares + long term loans

L t l i ti



Long-term solvency – gearing ratio

It is concerned with the company’s long-term

capital structure.A high gearing ratio indicates a high portion of

funds is obtained from borrowings. It may lead

to long-term insolvency. It is difficult to obtainfurther financing and has to bear a highinterest burden.

Ordinary shareholders may not get anydividends in bad times as very little profit isleft over for them



Gearing ratio

High geared company

Investment is more

risky

Larger dividends will beavailable in good times

Low geared company

The risk of investment

is relatively lower

It is more certain tohave dividends.



Changing the gearing

To reduce gearing

By issuing new ordinary

shares

By redeemingdebentures

By retaining profits

To increase gearing

By issuing debentures

By buying back

ordinary shares in issue By issuing new

preference shares





Earnings per share

Earnings per share (EPS)

Net profit after tax and preference dividends

= ------------------------------------------------------

No. of ordinary shares issued

(ranked for dividends)





Price / earning ratio

Price / earning ratio

Market price per share

= -----------------------------------------Earnings per share

It shows the profit in rupees associated with each

ordinary share. A higher earnings per share indicates the investors

may have higher confidence in the company. It is

more profitable to invest in the shares.

Dividend cover



Dividend cover

Dividend cover

Net profit after tax and preference dividends

= -------------------------------------------------------

Ordinary dividends paid and proposed

It shows the amount of profit that has been distributed as

dividends.

A low ratio means a large amount of profits has been retained as

reserves which can help to finance the operations of thecompany.

A high ratio means a large amount of profits has been distributed

as dividends. The dividend payment is vulnerable unless the

company becomes more profitable.

Dividend yield



Dividend yield

Dividend yield

Dividend per share for the year

= -------------------------------------------- X 100%

Current market price of the share This ratio measures the rate of return obtained from

dividends on an investment in shares.

A high dividend yield may imply the company ismore successful and efficient. It is more profitable to

invest in these shares.



Other ratios

The company will be able to pay interest on the loan when it

falls due. (short-term liquidity)

- current ratio and acid test ratio

It will be able to repay the loan on maturity. (long-termsolvency)

- operating profit / loan interest

- total external liabilities- shareholders’ fund / total assets

Limitations of ratio analysis



Limitations of ratio analysis

1. Different definitions of capital employed may cause

confusion.2. Changes in price level will affect the comparability of the

ratios between two financial periods.

3. Changes in external environment will affect the comparison.

4. Differences in management and background of various

businesses may affect the comparison.

5. Different accounting definitions, methods, techniques and

policies used by various businesses may affect thecomparability.

6. It is difficult to set up a proper standard for good

performance.

7. Short term fluctuations ma not be reflected.



Fund Flow Statement Analysis:

Working Capital Basis

Working capital



Working capital

Introduction

Working capital typically means the firm’s holding of current or short-term assets suchas cash, receivables, inventory and

marketable securities. These items are also referred to as

circulating capital

Corporate executives devote a considerableamount of attention to the management ofworking capital.



Definition of Working Capital

Working Capital refers to that part of the firm’s capital,

which is required for financing short-term or current

assets such a cash marketable securities, debtors and

inventories. Funds thus, invested in current assets keeprevolving fast and are constantly converted into cash and

this cash flow out again in exchange for other current

assets. Working Capital is also known asRevolving or Circulating capital or Short-

term capital.

Concept of working capital



Concept of working capital

There are two possible interpretations of workingcapital concept:

1. Balance sheet concept

2. Operating cycle concept

Balance sheet concept:

There are two interpretations of working capitalunder the balance sheet concept.

a. Excess of current assets overcurrent liabilities

b. gross or total current assets.



Excess of current assets over current liabilities arecalled the net working capital or net current

assets. Working capital is really what a part of long term

finance is locked in and used for supporting currentactivities.

The balance sheet definition of working capital ismeaningful only as an indication of the firm’s currentsolvency in repaying its creditors.

When firms speak of shortage of working capital theyin fact possibly imply scarcity of cash resources.

In fund flow analysis an increase in working capital,as conventionally defined, represents employment orapplication of funds.

What is Fund Flow Statement?



What is Fund Flow Statement?

Fund Flow Statement describes the sources from

which additional funds were derived and the uses towhich these funds were applied.

1.Increase the Current Assets but do not bring any

increase in Current Liabilities, and vice-versa. 2.Decrease the Current Assets but do not bring any

decrease in Current Liabilities and vice-versa.

Why to prepare Funds Flow Statement?



Why to prepare Funds Flow Statement?

1.Effective tool of managing working capital

2.Knowledge of change in working capital3.Knowledge of Funds from operation

4.Knowledge of inflow of Funds

5.Knowledge of Application of Funds

6.Knowledge as to the payment of C.L. and C.A.

7.Knowledge as to the purchase of F.A. and C.A.

8.Knowledge of supplementary information

9.Helps in Borrowing Operation 10.Acts as a

process of Budgeting

Funds Flow statement – Working Capital Basis



The funds flow statement, on working capital basis, presents (1) the source of

working capital. (2) The use of working capital (3) the net change in working

capital. Various sources and uses of working capital shown in the table below

Net change in working capital = Uses of working capital – Sources of working

capital

Sources and Uses of Funds on working Capital Basis:

Sources 1. Funds from operations

2. sales of non-current assets

3. Long term financing

(i) Long term borrowings (loans/bonds etc)

(ii) Issuance of equity and preference shares.

Uses: 1. Purchase of non-current assets

2. Repayment of long term and short term debt

3. Payment of cash dividends

Funds Flow Statement – cash Basis



Funds Flow Statement cash Basis The funds flow statement, on cash basis, shows (1) the sources of cash (2) the uses of cash (3) the net

change in cash. The sources of cash are the sources of working capital plus changes within the working

capital account which augments the cash resources of the business. The uses of cash again are thechanges which use working capital plus changes within the working capital account which deplete the

cash resources of the business. These latter changes are simply the increase in current assets other than

cash. The sources and uses of cash are shown below. Net change in cash = Sources of cash – Uses of

cash.

Sources and Uses of Funds on cash Basis:

Sources

1. Profits from operations

2. Decrease in any asset (other from cash)

3. Increase in liabilities

4. Issue of shares

Uses

1. Loss from operation

2. Increase in any asset (other from cash)3. Decrease in liability

4. Payment of cash dividends

The main difference between the working capital basis and the cash basis is that, working capital basis

treats increase in inventories and accounts receivable as equivalent to increase in cash. But in statement

on cash basis it summarizes only the cash inflows and outflows over a period of time and as the cash

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Ch.2 Techniques of Financial Analysis