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March 18, 2026The Accounting Review

Pitfalls in Calculating Cash Flow from Operations.

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Authors

RDRalph H. DrtinaCollege of AccountingILIII James A. Largay

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Implication

Identifies challenges in assessing cash flow from operations using indirect adjustments, highlighting errors in reported measures.

Key Points

  • This paper aims to uncover the difficulties faced in calculating cash flow from operations using indirect methods.
  • Identifying issues with cash-based statements of financial position.
  • Analyzing the indirect adjustments needed to calculate cash flow from operations.
  • Illustrating practical problems with the indirect method.
  • Cash flow from operations calculated using the indirect method may not reflect actual cash flow.
  • Numerous conceptual and practical problems are identified that complicate cash flow calculations.
  • Cash flow from operations is mainly estimated rather than accurately determined.

Cite This Study

Drtina et al. (1985) studied this question.

synapsesocial.com/papers/69ba43384e9516ffd37a447ahttps://doi.org/10.2308/tar-4487961
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1On Assessing a Firm's Cash Generating Ability.1990
  2. 2Nonarticulation in Cash Flow Statements and Implications for Education, Research and Practice.1996
  3. 3Funds-Flow Equations.1966
  4. 4THE 'CASH-FLOW' ILLUSION.1963
  5. 5OBSERVATIONS ON THE STATEMENT OF CASH FLOWS2024