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- Title
A Cash Flow Approach to Analyzing Long-term Liabilities: A Pedagogical Exercise.
- Authors
Trifts, Jack W.; Asare, Kwadwo N.
- Abstract
This paper presents a classroom exercise that helps students develop a mastery of analyzing long-term liabilities, including both on and off-balance sheet financing. This technique is best used as an extension to the traditional ratio-based financial analysis methods. While conceptually simple, this cash-flow based methodology provides a rich opportunity to introduce students to complex debt instruments, off-balance sheet financing, the complexities in some notes to financial statements and the relationships between valuation cash flows and debt service cash flows. The method is illustrated with a detailed example based on HCA Holdings, Inc.
- Subjects
CASH flow; LEGAL liability; RESEARCH on students; FINANCIAL statements; DEBT service; HCA Healthcare Inc.
- Publication
Journal of Financial Education, 2015, Vol 41, Issue 2, p129
- ISSN
0093-3961
- Publication type
Article