Measuring performance of a pharmaceutical company in the MENA region by means of the cash flow statement

Leonie Jooste

International Journal of Economics and Business Research, 2019, vol. 17, issue 1, 53-69

Abstract: Similar to a product an entity passes through four life-cycles stages. These stages reflect a set of financial characteristics of the flow of funds that leads to different measurements of income and cash flows. The cash flow statement supplies information about both income and cash flows. Therefore, a combination of the life-cycle theory, financial characteristics of income and cash flows, and an analysis of the cash flow statement may be useful as a performance measure and an indication of how the entity is managing their flow of funds. This paper evaluates an entity in the pharmaceutical sector in the MENA region by means of income and cash flow during the mature cycle. This paper uses steps for analysing the flow of funds and compares the application thereof to a benchmark in the mature phase of an entity's life cycle. In theory an entity will have typical income and cash flow patterns (financial characteristics) during each life-cycle stage. This study applies a model developed for performance evaluations during the different life-cycles. The results of this study show that the model may be used as an effective tool to illustrate the usefulness of the cash flow statement.

Keywords: accounting measures; cash flows; financial analysis; IAS 7; AC 118; income flow; life-cycle; performance evaluation. (search for similar items in EconPapers)
Date: 2019
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