Company appraisal – NBC Institute

CR – May 2018 – L3 – Q4a – IAS 7: Statement of cash flows

Explain four arguments against the view that historical cash flow is more useful than historical profit in appraising a company.

Question

It is often argued that historical cash flow is more useful in appraising a company than historical profit, particularly because cash flows are factual and do not involve the exercise of judgment.

Required:
Explain FOUR arguments against this view. (4 marks)

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Tags: Accrual Accounting, Cash Flow, Company appraisal, Financial Analysis, Profit
Level: Level 3

Topic: IAS 7: Statement of cash flows
Series: MAY 2018

Question Tag: Company appraisal

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CR – May 2018 – L3 – Q4a – IAS 7: Statement of cash flows

Explain four arguments against the view that historical cash flow is more useful than historical profit in appraising a company.

CR – May 2018 – L3 – Q4a – IAS 7: Statement of cash flows

Explain four arguments against the view that historical cash flow is more useful than historical profit in appraising a company.

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Question Tag: Company appraisal

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CR – May 2018 – L3 – Q4a – IAS 7: Statement of cash flows

Explain four arguments against the view that historical cash flow is more useful than historical profit in appraising a company.

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CR – May 2018 – L3 – Q4a – IAS 7: Statement of cash flows

Explain four arguments against the view that historical cash flow is more useful than historical profit in appraising a company.

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