Publication detail

Corporate Life Cycle and Its Impact on the Items Influencing Cash Flow

KONEČNÝ, Z.

Original Title

Corporate Life Cycle and Its Impact on the Items Influencing Cash Flow

Type

conference paper

Language

English

Original Abstract

One of the basic principles of financial management is, that there should be considered cash flows, not expenses and revenues, recorded in accountancy. This article is focused on the basic items of cash flow and there is found out, how do these items change itself during the corporate life cycle. To identify phases of corporate life cycle is used the model by Dickinson (2010), which is based on combinations of values, that reach the net cash flow from running, from investing and from financing activities, and there is only considered, whether these values are positive or negative. The research is implemented by using the method of analyzing secondary data, that are gotten from cash flow statements of selected companies. The sample consists of 43 companies acting on the Czech automotive industry and there were selected companies of all sizes with the legal form of either company limited by guarantee, or joint stock company. For each company there were found out data for periods from 2007 to 2011. The research showed, that adjustments and reserved are created especially during the phases of introduction and mature. Many companies in the phases of introduction and growth offer business loans to their customers, which has a negative influence on cash flow. On the contrary, during the phases of introduction, growth and mature use companies business loans from their suppliers, which is positive for cash flow, but in the phases of shake-out and decline are these business loans more reimbursed than offered and so it has a negative effect on cash flow. The amount of inventory increases most in the phase of introduction and decreases in the phase of shake-out. The long-term payables are used for financing especially during phases of introduction and growth, whilst from the phase of mature to the phase of decline are reimbursed. The same findings are valid for the changes in equity, too.

Keywords

corporate life cycle, cash flow, net cash flow from running activities, net cash flow from investing activities, net cash flow from financing activities

Authors

KONEČNÝ, Z.

RIV year

2013

Released

7. 3. 2013

Location

Brno

ISBN

978-80-87106-64-8

Book

Enterprise and Competitive Environment 2013

Pages from

78

Pages to

78

Pages count

1

BibTex

@inproceedings{BUT98363,
  author="Zdeněk {Konečný}",
  title="Corporate Life Cycle and Its Impact on the Items Influencing Cash Flow",
  booktitle="Enterprise and Competitive Environment 2013",
  year="2013",
  pages="78--78",
  address="Brno",
  isbn="978-80-87106-64-8"
}