We are delighted to share with you a report prepared by the Financial Reporting Lab of the Financial reporting Council on Disclosures on the sources and uses of cash in statutory accounts.
The authors summarise some of their findings thus:
“The understanding of the generation, availability, and use of cash is fundamental to the investment process, both in the assessment of management’s historical stewardship of a company’s assets, and in supporting analysis of future expectations. The core disclosure that supports these investor needs is the cash flow statement. This clearly provides information about the flow of cash (and equivalents), but does it do a good job of explaining how that cash is, and more critically will be generated and used? Our project would suggest that the disclosures that are most helpful to investors in answering their questions about cash are often provided outside of the cash flow statement, and may be outside of the annual report completely. This report focuses on this supplemental cash flow disclosure; disclosures that are principally about the sources and uses of cash.” .
A link to this report can be found here
Go Investment Partners is privileged to have participated in this project.