文章基本信息

标题：FREE CASH FLOW AS PART OF VOLUNTARY REPORTING. LITERATURE REVIEW
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作者：Negrea Laura Georgeta ; Matis Dumitru ; Mustata V. Razvan 等
期刊名称：Annals of the University of Oradea : Economic Science
印刷版ISSN：1222-569X
电子版ISSN：1582-5450
出版年度：2011
卷号：XX
期号：02
页码：591-591–596
出版社：University of Oradea
摘要：The present study has as main objective to reflect the state of literature regarding free cash flow, and to withdraw the main proâs and conâs in order to create an objective image upon this indicator. The main idea generating this research was the growing interest on cash flow reporting. As many say, Cash Flow is King, while in Anglo Saxon countries the interest of investors and analysts in concentrated on operating cash flow, as the most important indicator of the probability of bankruptcy. In this context, voluntary additional reporting, like free cash flow may come either as an aid in providing the fair view or as an opportunistically reported figure. Throughout the paper, the intention was to provide answers to three main research questions: What are the definition and calculation method of free cash flow? Why is there an interest in free cash flow reporting? What is the impact of free cash flow on the agency theory? In order to provide relevant conclusions, four international data basis were used, and related articles and studies were extracted. The results proved that there is no generally accepted definition and computing method, while the format depends on the end-user of the report (shareholders, investors, analysts, bankers, a.s.o.). As stated below, this aspect generates confusion and lack of comparability, giving room to creative accounting techniques. Moreover, the interest on free cash flow reporting is connected mainly to liquidity assessment, company valuation and investorsâ choice. Still, in the context of agency theory, results show that in presence of high free cash flow, managers tend to make investment choices that satisfy their personal interest and that generate low efficiency and profitability for the company. The contribution to current state of research is providing a literature review study, focused on a comparative approach, as well as on underlying an objective image upon a debatable financial indicator and accounting report.
关键词：free cash flow, reporting, management, agency theory, creative accounting