Credit Engineering for Bankers, 2nd Edition

Chapter 6 Cash Flow Analysis

Chapter Outline

• Introduction to Analysis 101
• Indirect Method of Cash Reporting: The Banker’s Cash Flow 102
• Direct Method of Reporting Cash 102
  • Investing Activities 102
    • Property, Plant, and Equipment 104
    • Unconsolidated Subsidiaries 104
    • Investment Project Cash Flows and Joint Ventures 104
  • Financing Activities 105
    • Long-Term Debt 105
    • Dividends 106
  • Operating Activities 106
    • Gross Operating Cash Flow 106
    • Equity Earnings 108
    • Deferred Tax Credits 108
    • Operating Cash Needs 108
    • Operating Cash Sources 109
    • Net Operating Cash Flow 109
• Cash Flow Workshop 109
  • Gem Furniture Corporation Deal Analysis 111
    • Scenario 111
    • Business Summary 111
    • The Four-Step Approach 112
  • First Step: Develop the Control Sheet for Gem Furniture ...