Title:
The Inclusion of Short-term Investments in Operating Cash Flow
The Inclusion of Short-term Investments in Operating Cash Flow
Author(s)
Mulford, Charles W.
Ely, Michael L.
Patel, Amit
Quiroz, Raul
Martins, Mario
Ely, Michael L.
Patel, Amit
Quiroz, Raul
Martins, Mario
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Abstract
Companies use short-term investments as a vehicle to park surplus cash. When such investments are classified as trading securities, cash used in their purchase and proceeds provided from their sale are included in operating cash flow. Classifying cash flow from trading securities as operating by non-financial companies can mislead users of financial statements regarding a company’s ability to generate cash flow from sustainable sources. In this report we survey the practices of non-financial companies regarding their inclusion of cash provided (used) by trading securities in operating cash flow.
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Date Issued
2003-09
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159666 bytes
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Text
Resource Subtype
Technical Report