Disclosure of Cashflow and Cashflow-Related Ratios in DAX-30 Companies

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Seminar paper from the year 2013 in the subject Business economics - Controlling, grade: 1, 0, Berlin School of Economics and Law, language: English, abstract: The financial crisis revealed that in addition to profitability, solvency and liquidity are indispensable for the sustainability of a business. Thus, instruments considering these aspects have gained in importance in recent years. In the framework of external reportings the statement of cashflows provides relevant information for shareholders as well as for potential investors in order to assess an entities' ability to meet financial obligations and obtain liquid. Further information relating to these aspects are addressed in the management commentaries and are communicated, inter alia, in the form of key figures. Both, the statement of cashflows and cashflow related ratios aim to provide an insight into a companies' financial standing. However, different requirements apply for their determination. An own standard for cashflow statements grant a uniform establishment of the cashflow statement whereas entities are not required to accommodate any requirements offered by legal authorities when reporting cashflow related ratios. As a result of the latter, entities tend to provide a broad range of different figures based on various computations. The objective of this seminar paper is to examine the disclosure of the cashflow statement as well as that of cashflow related ratios. The following research questions will be addressed in the seminar paper: 1. How are the legal requirements of cashflow statements applied at DAX-30 companies and what differences can be identified? 2. Which cashflow related ratios are provided by DAX-30 companies and what added value can be identified through their application? The research methodology applied in this seminar paper is a review of relevant literature in order to draw an overview of the main theoretical aspects regarding