Creative Cash Flow Reporting : Uncovering

Successful methodology for identifying earnings-related reporting indiscretions Creative Cash Flow Reporting and Analysis capitalizes on current concerns with misleading financial reporting on misleading financial reporting. It identifies the common steps used to yield misleading cash flow amounts, demonstrates how to adjust the cash flow statement for more effective analysis, and how to use adjusted operating cash flow to uncover earnings that have been misreported using aggressive or fraudulent accounting practices. Charles W. Mulford, PhD, CPA (Atlanta, GA), is the coauthor of three books, including the bestselling The Financial Numbers Game: Identifying Creative Accounting Practices. Eugene E. Comiskey, PhD, CPA, CMA (Atlanta, GA), is the coauthor of the bestselling The Financial Numbers Game: Identifying Creative Accounting Practices.

Charles W. Mulford, PhD, CPA, is Invesco Chair and Professor of Accounting in the College of Management at the Georgia Institute of Technology in Atlanta. He has coauthored three books, including the bestselling The Financial Numbers Game, published by Wiley. He has appeared on numerous broadcast networks, including CNBC, ABC News, and Bloomberg TV. He regularly consults with major domestic and international commercial banks and money management firms on issues related to credit and investment decision-making.

Eugene E. Comiskey, PhD, CPA, CMA, is Associate Dean for Faculty and Research, Callaway Chair, and Professor of Accounting in the College of Management at the Georgia Institute of Technology in Atlanta. For more than twenty years, he has consulted with commercial banks around the world. He is the coauthor of three books, including The Financial Numbers Game, and has published numerous papers in a wide range of professional and academic journals.

Foreword

xi

Preface

xiii

About the Authors

xv

Seeking Sustainable Cash Flow

1

(36)

An Artificial Boost to Operating Cash Flow

3

(2)

Classifying Cash Flow

5

(4)

Sustainable Cash Flow

9

(9)

Creative Cash Flow Reporting

18

(11)

Ignoring the Statement of Cash Flows

29

(1)

Cash Flow Analysis

30

(2)

Plan of This Book

32

(1)

Summary

33

(4)

Structure of the Statement of Cash Flows

37

(44)

Historical Background

38

(11)

Arrival of the Statement of Cash Flows

49

(19)

Non-GAAP Measures of Cash Operating Performance

68

(5)

International Differences in the Statement of Cash Flows

73

(1)

Summary

74

(7)

Is It Operating or Investing Cash Flow?

81

(40)

Investing Cash Flow

86

(5)

GAAP Flexibility: Is It Operating or Investing Cash Flow?

91

(23)

Beyond the Boundaries of GAAP

114

(2)

Summary

116

(5)

Is It Operating or Financing Cash Flow?

121

(38)

Financing Cash Flow

125

(6)

GAAP Flexibility: Is It Operating or Financing Cash Flow?

131

(23)

Beyond the Boundaries of GAAP

154

(1)

Summary

155

(4)

Income Taxes and the Statement of Cash Flows

159

(50)

Tax Reporting Essentials

160

(6)

Classification of Tax-Related Cash Flow

166

(14)

Nonrecurring Income Tax Cash Flows

180

(23)

Summary

203

(6)

Nonrecurring Sources and Uses of Operating Cash Flow

209

(32)

Characteristics of Nonrecurring Items of Operating Cash Flow

211

(1)

Examples of Nonrecurring Cash Sources and Uses

211

(2)

Management Identification of Nonrecurring Operating Cash Flow

213

(5)

Locating Nonrecurring Items of Operating Cash Flow

218

(13)

Cash Flow Tracking

231

(4)

Summary

235

(6)

Measuring Sustainable Operating Cash Flow

241

(28)

Sustainable Operating Cash Flow

242

(2)

Calibrating Operating Cash Flow Adjustments

244

(8)

Measuring Sustainable Operating Cash Flow

252

(5)

Completed Sustainable Operating Cash Flow Worksheet

257

(5)

Frequency and Size of Adjustment Items

262

(3)

Summary

265

(4)

Using Operating Cash Flow to Detect Earnings Problems

269

(36)

Relationship between Earnings and Operating Cash Flow

271

(13)

Earnings Supported by Artificial Means

284

(6)

Excess Cash Margin

290

(10)

Summary

300

(5)

Analyzing Operating Cash Flow

305

(40)

Cash Flow Analysis Statement

308

(6)

Using the Cash Flow Analysis Statement

314

(11)

Cash Flow Drivers

325

(11)

Closer Look at Core Operating Cash Flow

336

(5)

Summary

341

(4)

Understanding Free Cash Flow

345

(34)

Uses of Free Cash Flow

348

(10)

What Is Free Cash Flow?

358

(4)

Free Cash Flow to Common Equity: A Closer Look

362

(8)

Capital Expenditures

370

(5)

Acquisitions and Free Cash Flow

375

(1)

Summary

375

(4)

Glossary

379

(16)

Subject Index

395

(14)

Company Index

409

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Creative Cash Flow Reporting : Uncovering Sustainable Financial Performance

Summary

Author Biography

Table of Contents

Supplemental Materials

FREE SHIPPING

Rent More, Save More! Use code: BBRENTAL

5% off 1 book, 7% off 2 books, 10% off 3+ books

Creative Cash Flow Reporting : Uncovering Sustainable Financial Performance

Summary

Author Biography

Table of Contents

Supplemental Materials

Digital License