MCT sample content

MCT Advanced Diploma Sample Content

If our main objective is financial analysis of a company’s performance, cash-flow analysis has a number of strengths.

First, it concentrates on the dynamics of performance, in contrast to the inevitably more static financial ratio analysis, which it therefore complements.

Second, it deals strictly with cash flows as and when they occur and thereby un-winds the increasingly-complex mechanics of accruals accounting, which may either be formulated to produce a figure for period “income”, or distorted by the application of market valuations on the balance sheet.