The need for cash flow reporting: Greek evidence
SourceThe British Accounting Review
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This study provides empirical evidence on the extent to which Cash Flow From Operations (CFFO) are not proxied by more traditional measures of performance such as Operating Net Income (OPNI) and Working Capital From Operations (WCFO). The study employs a sample of 60 Greek firms. Our results indicate that OPNI and WCFO are highly correlated and do not proxy CFFO. Moreover, careful analysis of several Greek bankrupt firms' cash flows, among those Barko and Avrassoglou, could have indicated liquidity and solvency problems several years before bankruptcy. Barko's and Avrassoglou's WCFO and OPNI were positive over the ten-year period preceding bankruptcy. On the other hand, CFFO was negative in all ten years before bankruptcy. © 1990.