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New Investing And Financing Activity Ratios From The Statement Of Cash Flows Enhance Traditional Ratio Analysis In Assessing Future Cash Flows, Thomas Zeller
School of Business: Faculty Publications and Other Works
In November 1987, the Financial Accounting Standards Board (FASB) replaced the Statement of Changes in Financial Position with the Statement of Cash Flows (SCF). The intent is to provide better information to decision makers when the new statement is used in conjunction with the other financial statements. When the new investing and financing data from the SCF are merged with data from the other financial statements, new ratios may be developed to provide a more comprehensive analysis of capital structure. A refinement in the format of the SCF is suggested. Statement preparers may group essential investing and forecasting activities according …