The Role of Cash Flow Statements in Assessing Corporate Liquidity: Insights from Bulgarian Banks

Filipova Fanya (), Atanasov Atanas (), Marinova Rumyana () and Zapryanova Teodora ()
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Filipova Fanya: University of Economics - Varna
Atanasov Atanas: University of Economics - Varna
Marinova Rumyana: University of Economics - Varna
Zapryanova Teodora: University of Economics - Varna

Proceedings of the International Conference on Business Excellence, 2025, vol. 19, issue 1, 2816-2825

Abstract: The study aims to examine which information and indicators are used by banking institutions when assessing companies-borrowers’ corporate liquidity, and to what extent the cash flow statement serves as an information source. An online survey was conducted to obtain feedback from seven major banks operating in Bulgaria on their use of information from the Cash flow statements of borrowers. According to the results of the survey, information from the cash flow statement is used by Bulgarian banks mainly in connection with the assessment of risks and liquidity of borrowers. A significant part of the banks (85.7%) assume that information from all financial statements (Statement of Financial Position, Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity) is equally useful in analyzing the liquidity and creditworthiness of enterprises. Indicators related to cash flows and liabilities are determined as the most important in analyzing the liquidity and profitability of enterprises, according to Bulgarian banks. A significant part of the banks determines the information from the cash flow statement as moderately to very useful in decision-making.

Keywords: cash accounting; cash flow statement; corporate liquidity; usefulness of information in cash flow statement; liquidity ratios; cash flow information; bank lending practices (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:poicbe:v:19:y:2025:i:1:p:2816-2825:n:1025

DOI: 10.2478/picbe-2025-0217

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