Cash flow ratios in financial statements: an application for stone and land based industry sector

Abstract

International Financial Reporting Standards (UFRS) has made publishing cash flow statement mandatory, along with balance and income statement. In Turkey, Turkey Accounting Standards Board has published TMS 7 that is compatible with UFRS. TMS 7 requires that cash flow statement be documented in an action-based format. There are some studies discussing the effectiveness of action based cash flow statements for the use of analysis. Cash flow ratios have been used more frequently in financial performance assessment after UFRS made cash flow statement publishing mandatory. Cash flow ratio analysis requires the cash flow ratios to be calculated and interpreted. After the analysis, the action results of the company is assessed based on financial performance.  In this study, the cash flow ratio analysis of stocks of stone and land based industrial companies on ISE between 2012 and 2014. The purpose of this study is to assess the various dimensions of the companies performances using cash flow ratios.

Keywords: Cash flow, ratios, financial analysis, finance.