The Statement Of Cash Flows: Comparing The Incomparable

The statement of cash flows is a key component of Standard & Poor’s Ratings Services’ corporate credit analysis, and the comparability of this information between peer companies is critical. The problem is that no two statements of cash flows are alike. To deal with these inconsistencies in financial reporting, we often make adjustments to the reported amounts and, at other times, consider these differences qualitatively (see “Corporate Methodology: Ratios And Adjustments,” Nov. 19, 2013). In our view, there are ways to improve the transparency and comparability of the statement of cash flows to better enable financial statement analysis.

(Watch the related CreditMatters TV segment titled, “The Statement Of Cash Flows: Avoiding Analytical Pitfalls,” dated Sept. 25, 2012.)

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The Association of International Wealth Management of India (AIWMI) is a not-for-profit organization and a globally recognized membership association for finance professionals. AIWMI primarily focuses on the broad and strategic role of developing a more robust and forward-looking training infrastructure for the financial services sector and to promote more active industry involvement and collaboration in training and continuing education. AIWMI is offering advanced international certification programs along with a wide variety of high-quality executive education programs. AIWMI programs combine state-of-the-art knowledge and skills with practical experience and insights into the functioning of the financial sector. All AIWMI courses and educational events have an intense and pragmatic curriculum. Participants are exposed to the latest developments within the financial services sector. AIWMI plays a key role in guiding the development of the financial services sector. AIWMI works with key industry participants’ viz. the Government, the Regulators, the Industries/Associations, the Corporate, the Media and the General Public to achieve its objectives. Besides enhancing technical competence and professionalism in the industry, AIWMI organizes events and facilitates discussions to promote best practices in leadership and talent development in the financial sector with an aim to become Asia’s premier center of excellence for financial education.

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