Finanzas

A corporate finance Cash Flow model with float

Número
142
Autor
Rodolfo Apreda
Mes/Año
02/1999
Adjunto
Resumen

In this paper we introduce a Cash Flow Model with Float so as to overcome apparent shortcomings that pervade the Standard Cash Flow Model. We deploy the complex structure the float exhibits and this allows not only for strategic financial decision making but a much more sensible use of sources and applications of expected future cash flows, as well. Furthermore, it provides with a method for building up floats. It is a distinguishing feature in this model  that uncovers agency problems and costs. Besides, it gives grounds for a quantitative approach to free cash flows analysis. Prior to introducing the model, however, we derive both the Statement of Cash Flows and the Standard Cash Flow Model so as to weigh up their qualifications against the model with float.