lec4_NOI_Blackboard

lec4_NOI_Blackboard - Cash Flow vs Accrual-Based Measures...

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Unformatted text preview: Cash Flow vs Accrual-Based Measures of Performance Donut 2 Prematurely Recognizing Revenues Session Topics Limitations of PV data. Alternative performance metrics Cash flow measures Accrual measures creditors loan $ repayment of principal & interest Investors owners contribute $ future dividends Limitations of PV Data Limitations of PV Data 1. No representative time preference rate 2. Everyone views and assesses risk differently 3. Expectations are constantly changing 4. Data is subjective Markets penchant for a performance metric Performance = firms periodic cash generating ability Cash flow as a measure of performance Information Choice Criteria 1. Feasible 2. Factually-based 3. Related to future cash flows Operating Cycle Acquire resources Commit to production Provide G&S to public obligations claims pay to pay receive to future cash cash cash cash Lifetime Income Lifetime = Total enterprise- Total enterprise income cash inflows cash outflows Information Choice Criteria 1. Feasible 2. Factually-based 3. Related to future cash flows Fiscal vs. Calendar Year Net Cash Flow Net = cash inflows - cash outflows cash during year during year flow Information Choice Criteria 1. Feasible 2. Factually-based 3. Related to future cash flows...
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This note was uploaded on 05/24/2008 for the course ACC 203 taught by Professor Choi during the Spring '08 term at NYU.

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lec4_NOI_Blackboard - Cash Flow vs Accrual-Based Measures...

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