Cash Flow Analysis Based on International Accounting Standards (IAS): A Critical Evaluation

Abstract

Purpose: The purpose of this article is to investigate the importance of using financial ratio analysis following the adoption of International Accounting Standards. Design/methodology/approach: The methodology used investigates the theoretical aspects related to the purpose of financial statements analysis and the introduction of IAS, critically evaluating their differences with Greek Accounting Standards as well. Furthermore, it presents how to prepare the Cash Flow Statement. Findings: The study of cash flows and their use contributes to the understanding of the ability of an entity to generate cash and cash equivalents through its operating activities and to ensure its smooth operation through its investment and financing activities. Originality: The study assesses the importance of the IAS financial ratio analysis, studying the contributions of the Cash Flow Statement to different sources of activities, and evaluating the application of the direct and indirect methods.