Comments (8)

Dec 13, 2013

Google "Cash Flow Statement" real quick.

Are you trying to do a DCF without any knowledge of accounting?

Dec 13, 2013

Sorry. What I meant to say was that I can't get the change in AR to match the CF amount. Everything else matches up fine. Used the gross amounts and net and neither worked.

Dec 13, 2013

You're either mismatching time periods, or looking at inconsistent data. Make sure to use Edgar when looking at the financials.

I wouldn't worry about it, and just use the change in working capital for that period found on the cash flow statement.

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Dec 13, 2013

There are reasons that change in A/R in CFO would not match the change on the balance sheet. For example, if a company acquires another, the A/R accounts would be merged but the change in A/R resulting from the acquisition would not be embedded in cash flow from operations. Another possible reason could be FX adjustments

Generally for complicated companies it's likely you are going to have many issues recreating the SCF from the balance sheet. You'll run into problems as a result of a) acquisitions, particularly non-cash acquisitions, which may not have any effect on the SCF, b) non-cash investing/financing activities [i.e., buy a building by borrowing directly from the seller], c) FCTAs [fx adjustments], and d) other OCI adjustments [for example, you'd have trouble reconciling the securities account if an unrealized loss had occurred].

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Dec 15, 2013

Good analysis

Dec 15, 2013

You are right. Also, I would add that the absolute value of AR is not really an issue. It's the change in AR that matters.

Dec 15, 2013
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