Significant Cash Flow Research Articles

Evaluation of the Feasibility of Capital Participation Plan by Bangli Regency Government to PT. BPR Bank Daerah Bangli in 2023

This study aims to evaluate the feasibility of investment in capital participation by the Bangli Regency Government in PT BPR Bank Daerah Bangli for the period 2022-2026. This evaluation uses financial analysis methods including Payback Period, Net Present Value (NPV), and Internal Rate of Return (IRR). Based on the results of the analysis, it is known that the capital investment of Rp13 billion during the period generates significant cash flows, with a Payback Period of 4 years and 5.29 months. This shows that the investment capital can be returned faster than the planned investment duration of 5 years, thus indicating that this investment is feasible. The NPV calculation shows a positive value of Rp603,879,838, which indicates that this investment is profitable and provides added economic value to the Bangli Regency Government. Meanwhile, the IRR calculation result of 5.20% also shows that this investment provides a higher rate of return than the cost of capital. Thus, the combination of a positive NPV and an adequate IRR indicates that this investment project is economically feasible and can contribute positively to local finances. The projected profits earned during the analysis period show an increasing trend each year, further strengthening the potential sustainability of this investment. The profit received as dividends in 2022 was recorded at Rp2.71 billion and increased to Rp3.47 billion in 2026. In addition to providing a decent return for the government, this investment also has the potential to increase Regional Original Revenue (PAD) and support other regional development programs. Therefore, the Bangli Regency Government's capital participation in PT BPR Bank Daerah Bangli is considered a strategic step that is low risk but provides significant benefits.

A novel approach to determinants of corporate cash holdings: Evidence from the airline industry

Net cash flow is extremely important in capital-intensive industries. In industries operating on a global scale, such as the airline industry, situations such as a terrorist attack, financial crises, pandemic, or war can make cash flow uncertain and unreliable. The airline industry has faced significant cash flow problems during the COVID-19 pandemic. The interruption of net cash flow, especially during crises (e.g., Covid-19), causes some industries to experience financial stress. In this study, we aim to reveal the financial determinants of corporate cash holdings in the airline industry, based on the airline business model. In this context, we empirically analyzed airlines employing low-cost and traditional business models. Unlike previous research, we analyze the financial determinants of airlines' net cash flows from financing activities, investing activities and operating activities. This paper makes a substantial contribution to the literature by leveraging a comprehensive analysis of cash flow dynamics, shedding new light on financial performance. We devised a comprehensive approach by formulating five distinct models to scrutinize the determinants that influence corporate cash holdings. The proposed model demonstrates versatility within various segments of the aviation industry, making it applicable to both traditional and low-cost airline business models. The findings of the study indicate that there are differences between models regarding the financial determinants of corporate cash holdings. The analysis reveals interesting insights contrary to the conventional wisdom on corporate cash holdings in the airline industry. For instance, one of the most interesting findings of the study is that the financial structure of airlines is significantly determined by the source of net cash flow (from financing, investment and operational activities). Furthermore, the findings of the study provide a multidimensional understanding of the factors affecting airlines' corporate cash holdings.

Walt Disney’s Business Model

Disney is a well-known worldwide entertainment company with a wide range of investments, including entertainment and motion picture production. The SWOT analysis framework is utilized in this article to examine Disney’s advantages, disadvantages, opportunities, and threats to clarify the elements that have contributed to the company’s success. Disney’s resilience in the face of a changing business is seen in its strong alliances, significant cash flow, and wide range of products and services. However, its dependence on flagship properties and vulnerability to outside influences present difficulties. By utilizing Disney’s connections and experience, there are several potentials to grow into the internet streaming market with Disney Plus. However, threats like increased competition and economic instability still exist. Analyzing Disney’s development and strategic decisions highlights the company’s lasting impact on the entertainment industry and exemplifies a revolutionary business strategy with broad implications.

Теневой денежный поток: практика ретроспективной методики мониторинга

Shadow money flows in the current international geopolitical situation cause enormous damage to the economies of developed countries. It is impossible not to take into account the negative aspect of the existence of money masses in shadow, including criminal structures. In this regard, the issue of methodological security of the economic system of our country remains relevant. In Russia, there is a generally accepted risk-based AML / CFT system implemented by Rosfinmonitoring services in cooperation with law enforcement agencies. But as law enforcement practice shows, causing significant damage when committing fraudulent actions continues to be the norm for the criminal community. As a result, for example, significant cash flows appear in the compositions of cybercrimes, which make it possible to extract illegal economic benefits, until the state regulatory authorities become aware of the facts of shadow enrichment of interest. In addition, there is a discrepancy between the methods of preliminary monitoring of possible cash flow, in order to prevent it, and the methods of retrospective monitoring, the main purpose of which is not to prevent, but to identify the entire chain of shadow business entities, in order to stop their illegal activities as a whole, and not for a separate transaction or a group of interrelated banking operations. The article presents a methodology for monitoring the shadow cash flow, based on the scientific provisions of the theoretical and methodological approach, the key task of which is to improve the quality of assessment of the state of economic security of Russia. By illustrating the sequential steps of monitoring on the example of a specific case, the author’s research results are systematized and the most pronounced aspects of monitoring the shadow cash flow are identified.

Wall street QE vs. main street lending: A comment

Are direct lending to non-financial firms (Main Street Lending) and asset pur- chases (Wall Street QE) substitute or complementary policies? Which financial frictions are most effectively addressed by each of them? The paper by Cardamone et al. (2023) addresses these questions by contrasting the effectiveness of central bank asset purchases and direct lending to non-financial corporations through the lens of a tractable macro-banking model. Their results show that Main Street Lending is highly stimulative for COVID-19 type recessions which are characterized by significant cash flow shortages for non-financial firms. Wall Street QE is instead only effective in recessions featuring an impairment of the balance sheet of financial intermediaries, such as the 2007–2009 Great recession.

Wall Street QE vs. Main Street Lending

Monetary and fiscal authorities reacted swiftly to the COVID-19 pandemic by purchasing assets (or “Wall Street QE”) and lending directly to non-financial firms (or “Main Street Lending”). Our paper develops a new framework to compare and contrast these different policies. For the Great Recession, characterized by impaired balance sheets of financial intermediaries, Main Street Lending and Wall Street QE are perfect substitutes and both stimulate aggregate demand. In contrast, for the COVID-19 recession, where non-financial firms faced significant cash flow shortages, Wall Street QE is almost completely ineffective, whereas Main Street Lending can be highly stimulative.

Pengaruh Komite Audit, Komisaris Independen, Kepemilikan Institusional, Free Cash Flow, Dan Leverage

Earnings quality reflects the actual performance of the company in generating operating income. Earnings quality can be an indication of the ability of earnings information to respond to the market. In addition, the quality of earnings gets attention and plays an important role in making investment decisions for investors and various parties.
 This study aims to determine the effect of audit committee, independent commissioners, institutional ownership, free cash flow, and leverage on earnings quality in food and beverage companies. The population in this study were all companies. There are 28 food and beverage companies. While the sample used as many as 20 samples with a total data in this study of 80 data. Then the data in this study were analyzed using descriptive statistics and panel data regression.
 The results showed that the audit committee, independent commissioners and institutional ownership, free cash flow, and leverage had a significant effect on earnings quality. Partially, audit committee has a significant positive effect, independent commissioners, institutional ownership, and free cash flow has no significant effect, and leverage has a negative significant effect on earnings quality.

Faktor yang memengaruhi keputusan Cash Holding pada Perusahaan Manufaktur di Indonesia

This study aims to examine the relationship between Leverage, Cash Flow, and Net Working Capital on Cash Holding moderated by GCG. The dependent variable of this study is Cash Holding, the independent variable is Leverage, Cash Flow, and Net Working Capital, and the moderating variable is GCG. Manufacturing companies listed on the IDX during the 2017 to 2019 period were used as samples for this study using a purposive sampling research method. The total sample obtained by this method is 130 samples with a total of 390 observations. This study uses the panel data analysis method with a fixed-effect model as an estimation model. The results indicate that Leverage has a significant effect, meanwhile, Cash Flow and Net Working Capital have no significant effect on Cash Holding, and GCG proxied by the activities of the board of commissioners found cannot moderate the effect of all independent variables on Cash Holding significantly.

Impacts of reserve and decommissioning disclosures on value and performance of oil and gas firms listed in the UK

Oil and gas reserves and asset decommissioning are the most significant cash flow indicators of the oil and gas industry. Investors use disclosures by oil and gas firms to estimate future cash flows. Thus, this study examines impacts of oil and gas reserve disclosures and disclosures of decommissioning costs of oil and gas assets on the financial performance and value of listed oil and gas companies in the UK. We survey data from 52 listed firms. We conclude that whilst mandatory and voluntary reserve disclosures negatively impact firms’ performance, they positively impact value. Mandatory decommissioning disclosures are positively related to performance and value. Voluntary decommissioning disclosures negatively correlate with firms’ value, but positively relate with firms’ performance. These findings contribute to the debate around the usefulness and impacts of oil and gas reserves disclosures and disclosures of decommissioning costs of oil and gas assets on companies values and performance.

Вплив якості аудиту, фінансового стану та управління доходами на аудиторську думку про безперервність діяльності з корпоративним механізмом як модеруючою змінною

Going concern is an accounting term used to describe a business that is expected to operate for the foreseeable future or at least the next 12 months. The concept of going concern is particularly relevant in times of economic difficulties and in some situations auditor may determine that a profitable company may not be a going concern, for example because of significant cash flow difficulties. This research aims to study the influence of audit quality, financial condition and earnings management on the auditor's opinion on going concern with corporate mechanism as a moderating variable. This study analyzes data from the financial statements of 49 manufacturing companies listed on the Indonesian Stock Exchange in 2018-2020. The results of this study provide empirical evidence that giving a going concern audit opinion by the auditor is not based on the quality of the auditor because he acts in accordance with auditing standards. Financial condition and earnings management have a significant effect on the going concern audit opinion. When a company experiences a bad financial condition, it is very likely that it will receive a going concern audit opinion because there are signs of difficulties in maintaining the viability of its business. The corporate mechanism is able to moderate only the influence of financial condition on the going concern audit opinion. Thus, the auditor's opinion on going concern based on analysis of financial reporting data is important for investors and other interested parties who want to be sure of their decisions.

An Evaluation of the Causes and Effects of Delayed Payments on the Productivity of Construction Companies in Guyana

Delayed payments for services rendered by contractors are seen as a key problem in the construction sector. It causes significant cash flow problems, which can obliterate the contractual payment chain. The study was done to determine the causes and effects of delayed payments for works completed in the construction sector in Guyana and to ascertain the actions taken by contractors to overcome these problems. In order to obtain data for the study, a random sample of 180 contractors, consultants, and clients in the construction sector in Region 4 were emailed questionnaires. A total of 65 questionnaires were completed and returned for analysis. The ranking of the findings for the causes of delayed payment were determined using the relative importance index for four categories: contractor-related factors, client-related factors, contract-related factors, and consultant-related factors. Effects of delayed payments on contractors’ productivity and finance and actions taken by contractors to overcome delayed problems were also studied. Some of the causes of delayed payment from the study include contractors’ disagreement on valuation of the work, contractors’ failure to substantiate their claims, delay in certification of work done by architect or contract administrator, delay in valuation of work done by quantity surveyor, client delay in certification unrealistic cash, client failure to agree to the valuation of work. From the study, delayed payments results in delay in project progress and have effects on the materials supply capabilities of contractors, the forecasted profit margin, and the amount of the line of credits provided by materials suppliers and banks. Some of the preferred actions taken by contractors include following up with clients by direct communication, applying interest charge to the overdue payments, and slowing down the construction work at site until payment is received.

Weathering Cash Flow Shocks

Unexpectedly severe winter weather, which is arguably exogenous to firm and bank fundamentals, represents a significant cash flow shock for bank-borrowing firms. Firms respond to these shocks by drawing on and increasing the size of their credit lines. Banks charge borrowers for this liquidity via increased interest rates and less borrower-friendly loan provisions. Credit line adjustments occur within one calendar quarter of the shock and persist for at least nine months. Overall, we provide evidence that bank credit lines are an important tool for managing the non-fundamental component of cash flow volatility, especially for solvent small bank borrowers.

Weathering Cash Flow Shocks

ABSTRACTUnexpectedly severe winter weather, which is arguably exogenous to firm and bank fundamentals, represents a significant cash flow shock for bank‐borrowing firms. Firms respond to these shocks by drawing on and increasing the size of their credit lines. Banks charge borrowers for this liquidity via increased interest rates and less borrower‐friendly loan provisions. Credit line adjustments occur within one calendar quarter of the shock and persist for at least nine months. Overall, we provide evidence that bank credit lines are an important tool for managing the nonfundamental component of cash flow volatility, especially for solvent, small bank borrowers.

Cash flow uncertainty, financial constraints and R&D investment

Based on the data from Chinese listed companies of Shanghai and Shenzhen stock markets between 2005 and 2016, we systematically examine the relationship between cash flow uncertainty and R&D investment, and further research the moderating effect of financial constraints on the association between the two. Our empirical results find that R&D investment decisions tend to be more conservative and cautious due to cash flow uncertainty, which is not conducive to innovation efficiency. Firms with higher cash flow uncertainty invest more cautiously in R&D innovation, whereas firms with lower cash flow invest more boldly in R&D innovation. Financial friction may exacerbate the negative impact of cash flow uncertainty on innovation activities. Strategic cash holding can help firms better deal with the risks caused by cash flow uncertainty. In provinces with high marketization, the market competition intensifies, resulting in more significant cash flow uncertainty.

The investment behaviour of dairy farms in transition economies

ABSTRACT This article investigates dairy farm investment behaviour and the presence of soft budget constraints in the dairy farms of Baltic and Central European transition countries – Estonia, Hungary and Slovenia – using individual dairy farm accountancy panel data for the years 2007–2015. The empirical results confirm that gross dairy farm investment is positively associated with gross dairy farm investment for the previous year for financially unconstrained dairy farms, and negatively for financially constrained dairy farms. It is also positively associated with public investment subsidies, and, except for Slovenia, with growth in real sales for financially unconstrained dairy farms. Mixed results are found for gross dairy farm investment squared and cash flow variables. A particularly significant negative cash flow regression coefficient implies significant soft budget constraints for financially unconstrained Estonian and Slovenian dairy farms, while insignificant cash flow regression coefficients imply weak soft budget constraints for financially unconstrained Hungarian dairy farms.

Customer concentration and stock price crash risk

We investigate the impact of customer concentration on stock price crash risk. Customer concentration may represent a source of significant cash flow and business risk for supplier firms or benefit supplier firms in terms of efficient product, inventory and supply chain management. Using a large sample of firms for the period 1977–2016, we find that corporate customer concentration is positively associated with stock price crash risk. We find, however, that government customer concentration is negatively associated with stock price crash risk. Further analyses demonstrate that our results are robust to potential endogeneity and reverse causality concerns. In the cross-sectional analyses, we find that the likelihood that a supplier firm with a concentrated customer base experiences higher crash risk is attenuated by lower switching cost and is accentuated when the degree of information asymmetry is high.

Wall Street vs. Main Street QE

The Federal Reserve has reacted swiftly to the COVID-19 pandemic. It has resuscitated many of its programs from the last crisis by lending to the financial sector, which we refer to as “Wall Street QE.� The Fed is now proposing to also lend directly to, and purchase debt directly from, non-financial firms, which we refer to as “Main Street QE.� Our paper develops a new framework to compare and contrast these different policies. In a situation in which financial intermediary balance sheets are impaired, such as the Great Recession, Main Street and Wall Street QE are perfect substitutes and both stimulate aggregate demand. In contrast, for situations like the one we are now facing due to COVID-19, where the production sector is facing significant cash flow shortages, Wall Street QE becomes almost completely ineffective, whereas Main Street QE can be highly stimulative.

PENGARUH MODAL KERJA, PERPUTARAN KAS, DAN ARUS KAS TERHADAP CURRENT RATIO PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA PERIODE 2013-2016

This research is meant to find out the effects of working capital, cash turnover, and cash flow on the current ratio of manufacture companies which are listed in Indonesia Stock Exchange (IDX) in 2013-2016 periods both simultaneous and partial and to find out which one of these independent variables that significant effects to the current ratio of manufacture companies which are listed in Indonesia Stock Exchange. Research data tested with testing classical assumptions and use multiple linear regression analysis. The results showed that the variable working capital has positive and significant effects, cash turnover and cash flow have negative and significant effects on the current ratio in manufacturing companies which are listed in the Indonesian capital market in the 2013-2016 periods.

Agricultural soft budget constraints in new European Union member states

AbstractThis article investigates farm investment behaviour and the presence of soft budget constraints in the agricultural sectors of three Central and Eastern European countries – Estonia, Hungary and Slovenia – using individual farm accountancy panel data for the 2007–2015 period. Gross farm investment is positively associated with gross farm investment for the previous year, growth in real sales and public investment subsidies. Mixed results for debt square and cash flow variables imply that the different investment behaviour of farms pertains to different structures of investment sources among the countries under analysis. A particularly significant negative cash flow coefficient implies strong soft budget constraints for Estonian farms, while insignificant cash flow coefficients imply weak soft budget constraints for Hungarian and Slovenian farms.

Profitability of dairy cows submitted to the first service with the Presynch-Ovsynch or Double-Ovsynch protocol and different duration of the voluntary waiting period

The objective of this study was to compare cash flow and parameters of economic performance for dairy cows submitted to the first service using a combination of insemination at detected estrus and timed AI (TAI) in cows synchronized with the Presynch-Ovsynch (PSOv) protocol versus all TAI after synchronization of ovulation with the Double-Ovsynch (DO) protocol with different durations of the voluntary waiting period. A secondary objective was to calculate the variation in cash flow under different input pricing scenarios through stochastic Monte Carlo simulation. Lactating Holstein cows from a commercial dairy farm were randomly assigned to 3 first-service management programs. Cows in the PSOv treatment (n = 450) received first service through a combination of insemination at detected estrus after a voluntary waiting period of 50 d in milk (DIM; i.e., after second PGF2α treatment of the protocol) and TAI at 72 ± 3 DIM. Cows in the DO60 (n = 458) and DO88 (n = 462) treatments received first service by TAI at 60 ± 3 and 88 ± 3 DIM, respectively. Individual cow cash flow was calculated for the calving interval after enrollment and for an 18-mo period after calving. Cash flow was the aggregation of daily income over feed cost, replacement cost, calf value, recombinant bovine somatotropin treatment cost, reproductive cost, and other operating expenses. All analyses were conducted separately for primiparous and multiparous cows. Continuous, binomial, and time to event outcomes were analyzed using ANOVA, logistic regression, and Cox's proportional hazard regression in SAS (SAS Institute Inc., Cary, NC). Treatments affected the dynamics of pregnancy creation, which affected time to pregnancy during lactation. As a result, we observed differences in the proportion of nonpregnant cows at the end of lactation, herd exit dynamics, lactation length, calving interval, and proportion of cows that calved again. Some of these effects varied by parity, affecting the direction and magnitude of treatment differences within parity group. For primiparous cows, maximum cash flow differences per slot for the 18-mo period were in the range of $26 (PSOv > DO60) to $29 (DO88 > DO60) but did not differ statistically. For multiparous cows, maximum cash flow differences per slot for the 18-mo period were in the range of $122 (PSOv > DO88) to $155 (DO60 > DO88) but did not differ statistically. Despite the substantial differences in cash flow (in particular for multiparous cows) caused by the effect of treatments on reproductive performance, herd exit dynamics, and calving interval, large variability in overall cash flow among individual cows and compensation between multiple outcomes resulted in lack of statistical differences in cash flow. Outcomes from the stochastic analysis indicated that similar trends for differences between treatments would be observed under varying scenarios for economic input values. In conclusion, we did not detect statistically significant cash flow differences between the PSOv, DO60, and DO88 treatments, but numerical trends and stochastic simulation indicated that the DO88 and PSOv treatments were more economically favorable than the DO60 treatment for primiparous cows. For multiparous cows, the DO60 and PSOv treatments were more economically favorable than the DO88 treatment.