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key drivers to cash flow

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Answer the attached questions with at least five sentences each, >>>thoroughly and in your own words<<<

1. Identify two key drivers to cash flow. How do these drivers impact corporate value?

2. Define market efficiency.

3. What are some of the ambiguities encountered in accounting on an accrual basis?

4. How could accounting profits for the same time period differ when determined for tax purposes versus public accounting (reporting) purposes?

5. How do you go from accounting reports based on accrual accounting to determining cash flows?

6. Distinguish between a financial indicator and a value driver.

7. What is the argument that DCF is a major determinant of stock prices?

8. What is the comparative relevance in short-term factors/long-term factors in determining stock prices?

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Answer the attached questions with at least five sentences each, >>>thoroughly and in your own words<<<

1. Identify two key drivers to cash flow. How do these drivers impact corporate value?
The first key driver to cash flow is the collection of receivables. A company may grow its sales but it does not generate cash till the receivables are collected. Otherwise increase in sales will lead to increase in receivables. The second key driver to cash flow is the management of payables. In other words it means holding onto the payables for as long as possible without incurring late fees. It also means negotiating with suppliers to extend to you good payment terms. These drivers directly affect corporate value because it affects the liquidity of the company. Liquidity is the lifeblood of the corporation. Having good cash flow systems in places makes sure that the company has money to take advantage of opportunities that arise at the best possible time.

2. Define market efficiency.
Market efficiency means that the price of the stock reflects the available information and purchasing or selling of stock should, get the purchaser or seller a "fair " measure of return for the associated risk. In short very few people or mutual funds actually beat the market on the a risk adjusted basis. Market efficiency from another point of view arises fro the efficient-market hypothesis that claims that financial markets are information efficient, or the prices reflect information that is known and will change quickly to reflect new information. In other words, one cannot out do the market again and again with the information that the market already knows. This theory has been criticized from several quarters. Several popular books have been written that investors can actually beat the market. On the other there are economists who blame the present financial crisis for the efficient market hypothesis. ...

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