MANAGERIAL DECISION MAKING BY ANALYZING THE FINANCIAL FLOWS

Luciana Spineanu-Georgescu, Elena Ruse and Daniel Daneci-Patrau
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Luciana Spineanu-Georgescu: Spiru Haret University, Constanta
Elena Ruse: Spiru Haret University, Constanta
Daniel Daneci-Patrau: Spiru Haret University, Constanta

SEA - Practical Application of Science, 2014, issue 4, 129-136

Abstract: Financial flows represent a reasonable basis for estimating the capacity of firms to generate cash and cash equivalents necessary to meet debt chargeability. If cash means actual monetary liquidity held in company’s cashier or in its bank accounts, cash equivalents represent "short-term investments, highly liquid, which are readily convertible to known amounts of cash and which are subject to an insignificant risk of exchange. Over time, in an attempt to systematize the information regarding the structure, the origin and destination of the funds used by enterprise, liquidity setters concluded that variation can be explained by the action of three types of activities based on a functional classification, namely operating activities, financing activities and investing activities. The present paper aims to determine the importance and evolution of financial flows in an economic entity using the indirect method.

Keywords: Analysis; Financial flows; Cash-flow (search for similar items in EconPapers)
JEL-codes: G00 M10 (search for similar items in EconPapers)
Date: 2014
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