A Corporate Finance Cash Flow model with Float
AbstractIn this paper we introduce a Cash Flow Model with Float so as to overcome apparent shortcomings that pervade the Standard Cash Flow Model. We deploy the complex structure the float exhibits and this allows not only for strategic financial decision making but a much more sensible use of sources and applications of expected future cash flows, as well. Furthermore, it provides with a method for building up floats. It is a distinguishing feature in this model that uncovers agency problems and costs. Besides, it gives grounds for a quantitative approach to free cash flows analysis. Prior to introducing the model, however, we derive both the Statement of Cash Flows and the Standard Cash Flow Model so as to weigh up their qualifications against the model with float.
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Bibliographic InfoPaper provided by Universidad del CEMA in its series CEMA Working Papers: Serie Documentos de Trabajo. with number 142.
Date of creation: Feb 1999
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Cash Flow; Float; Corporate Finance; Corporate Governance;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- M40 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - General
- M20 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - General
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- Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-29, May.
- Rodolfo Apreda, 1999. "The Cash Flow Model with Float: A New Approach to Deal with Valuation and Agency Problems," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 247-279, November.
- Rodolfo Apreda, 1999. "Corporate Governance in Argentina - New Developments through 1991-2000," CEMA Working Papers: Serie Documentos de Trabajo. 154, Universidad del CEMA.
- Rodolfo Apreda, 2011. "GOVERNANCE RISKS. How to measure them by means of the incremental cash-flow model," CEMA Working Papers: Serie Documentos de Trabajo. 467, Universidad del CEMA.
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