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Cash Flow Analysis and Forecasting

Exam Questions: 75
Course Level: Basic
Pages: 386 | Content: 376, Supplemental: 10
NASBA Area of Study: Accounting
Not Acceptable for: Enrolled Agents
Version: 7125B

This course provides practical instruction on all aspects of historical cash flow analysis. It is written from a cash flow-centric point of view, and provides an overview of the risks to be managed in preparing cash flow forecasts. It includes topics such as understanding how cash flows in a business, the analysis of the cash flows of businesses in various stages, the restatement of cash flows of a business, and cash flow analysis and credit risk. PLEASE NOTE: This course uses British terminology. Not accepted for Enrolled Agents. All course material provided. No prerequisites. Course level: Basic.

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Course Information

Table of Contents
  • Understanding How Cash Flows in a Business
  • Understanding Cash Flows Properly
  • Start-up, Growth, Mature, Decline
  • Restating the Cash Flows of a Real Business
  • Restating US GAAP Cash Flows
  • Analysing the Cash Flows of Mature Businesses
  • Analysing the Cash Flows of Growth Businesses
  • Growth and Mature - Further Analysis Issues
  • Analysing the Cash Flows of Start-up Businesses
  • Analysing the Cash Flows of Decline Businesses
  • What to Do About Bad Cash Flows
  • Cash Versus Profit as a Measure of Performance
  • Cash Flow Analysis and Credit Risk
  • Cash Flow Analysis and Performance Measurement
  • Analysing Direct Cash Flow Statements
  • Generating a Cash Flow Summary from Profit and Loss Account and Balance Sheet Data
  • Summarising Historic Free Cash Flow
  • Introduction
  • Spreadsheet Risk
  • Good Practice Spreadsheet Development
  • The Use of Assumptions in Spreadsheet Models
Objectives
  • To recall various cash flow items of a business
  • To recognize the various sections of a cash flow statement
  • To identify characteristics of businesses in the four different life-cycle stages for businesses
  • To recognize the most common method in preparing cash flow statements
  • To recall the background and source of a US GAAP cash flow statement
  • To recognize the cash flow issues of mature businesses
  • To recognize the cash flow issues of growth businesses
  • To recall the components of net working assets
  • To recognize the cash flow issues of start-up businesses
  • To recognize the cash flow issues of decline businesses
  • To identify causes for a cash flow shortfall
  • To recognize the differences between cash flow and profits
  • To identify the impact of credit risk in analyzing cash flow statements
  • To identify which financial ratio is best for measuring success
  • To recall how direct cash flow statements are prepared
  • To identify problems an analyst would encounter if a cash flow statement is not available
  • To recognize the components of free cash flow
  • To identify issues of forecasting cash flows
  • To recognize the process and problems in creating spreadsheets
  • To recall some of the techniques recommended to reduce spreadsheet risk through good modeling practice
  • To identify what is meant by a real forecast

PLEASE NOTE: CPE credit measurement is based on NASBA Registry and QAS guidelines of one credit for every 50 minutes. Credit calculation may vary in different states — check with your State Board of Accountancy. Unless otherwise noted in the specific course description, no advanced preparation is required in order to register or complete any PES CPE course. Use of materials or services provided by Professional Education Services, LP ("PES") are governed by the Terms and Conditions stated on PES' website www.mypescpe.com. PES provides these courses with the understanding that it is not providing any accounting, legal, or other professional advice and assumes no liability whatsoever in connection with its use. PES has used diligent efforts to provide quality information and material to its customers, but does not warrant or guarantee the accuracy, timeliness, completeness, or currency of the information contained herein. Ultimately, the responsibility to comply with applicable legal requirements falls solely upon the individual licensee, not PES. PES encourages you to contact your state Board for the latest information and to confirm or clarify any questions or concerns you have regarding your duties or obligations as a licensed professional.