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Cash Flow Statements


  • Jadranka Kapic

    () (University of Sarajevo, Faculty of Economy)


Financial statements are aimed at providing information that can be used by investors and creditors to forecast, compare and evaluate potential money in cash flows for their needs by the amount, the time schedule and the characteristic risks. The purpose of financial statements is to provide the beneficiaries with information to forecast, compare and evaluate the financial position, profit and loss levels and financial position changes, that is, the information on how the company acquired and spent the money, and on the company’s debts and repayment of debts, and on the capital transactions, including payments of dividends and other distributions to the proprietors, as well as all other factors that influence the company’s liquidity and ability to pay. This information should be useful to a wide circle of beneficiaries in the business decision-making process. In their views of the purposes of financial statements, the International Accounting Standards Committee indicates that «economic decisions of financial statement beneficiaries require evaluation of the company's ability to produce cash and cash equivalents, as well as the time schedule and the certainty of their production, pointing, naturally, to the basic financial statements, that is, the balance sheets, as financial statements on financial positions (Item 16), and the profit and loss balance, as the financial statements on the company’s performance (Item 17), but also to the financial statements on the changes in the financial positions, primarily as financial statements (Item 18), the unsurpassable information sources for the forecast, the comparison, and the evaluation of the company by the beneficiaries.

Suggested Citation

  • Jadranka Kapic, 2009. "Cash Flow Statements," Economic Analysis, Institute of Economic Sciences, vol. 42(3-4), pages 38-49.
  • Handle: RePEc:ibg:eajour:v:42:y:2009:i:3-4:p:38-49

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    References listed on IDEAS

    1. Steven G. Rivkin & Eric A. Hanushek & John F. Kain, 2005. "Teachers, Schools, and Academic Achievement," Econometrica, Econometric Society, vol. 73(2), pages 417-458, March.
    2. Schneider, Andrea, 2010. "Redistributive taxation vs. education subsidies: Fostering equality and social mobility in an intergenerational model," Economics of Education Review, Elsevier, vol. 29(4), pages 597-605, August.
    3. Hoyt, William H. & Lee, Kangoh, 1998. "Educational vouchers, welfare effects, and voting," Journal of Public Economics, Elsevier, vol. 69(2), pages 211-228, June.
    4. McMillan, Robert, 2004. "Competition, incentives, and public school productivity," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1871-1892, August.
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    More about this item


    Capital; cash flow; financial statements; decision-making process; investment;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing


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