Full Time MBA, Ifrane March 14th, 2023

Managerial Accounting
Dr. SATT Harit
ACC 5302

Cash Flow Statement Analysis

CONTEXT

You will conduct a Cash Flow Statement analysis of a for profit company that is of singular interest to you.

The company you select can be located in any country and has to be listed and reporting under IFRS/GAAP.

INTENDED OUTCOMES

The purpose of the cash flow statement analysis is to track how entities are generating cash and how they are

spending it over a given time period. It is relevant for analyzing long-term solvency and liquidity of the

company. After your analysis, you will know how your selected company generates cash and how it spends it.

You will be confident talking about the major areas of the business.

THE PROCESS

- Retrieve the latest published Cash Flow Statement of the company you selected.

- For the next step, you will be analyzing each of the three categories separately:

o Cash Flow from Operations

o Cash Flow from Investing

o Cash Flow from Financing

- For each category, compute the percentage that each account represents from the subtotal of the whole

category (vertical analysis). For example: (NI x 100) / Subtotal of Cash from Operations.

o Note that you will have positive numbers for cash inflows and negative numbers for cash

outflows. Use the terms in absolute value for all the following computations.

Also verify that all your percentages from all three categories add up to 300% (100% for each
1
 Full Time MBA, Ifrane March 14th, 2023
Managerial Accounting
Dr. SATT Harit
ACC 5302

- Compute the average of all the percentages of all three categories (one average for the entire cash

flow statement, not the average for each category).

- The average percentage you got is your benchmark for the analysis.

- Compare the percentage that each account from each category represents to your benchmark.

(< or >).

- Your key accounts are those that are greater (>) than the benchmark, which is the average.

- This last part is where your analytical skills will take the lead. You are to analyze every key account

of the company and come up with an explanation for why that account is a major one. For example,

it could be a trend among the entire industry, or it could be an exceptional event occurring only in

that specific quarter or year, etc. What are the risks for the long term? How can you hedge?

The floor is yours, know your business.

Deliverables

• A scholarly report of 3 pages, APA style for citation and referencing.

• A power point presentation.

• Date to be announced in class.