Unexpectedly severe winter weather, which is arguably exogenous to firm and bank fundamentals, represents a significant cash flow shock for bank-borrowing firms. Firms respond these shocks by drawing on increasing the size of their credit lines. Banks charge borrowers this liquidity via increased interest rates less borrower-friendly loan provisions. Credit line adjustments occur within one cal...

Abstract Theory has recently shown that corporate policies should depend on firms’ exposure to short- and long-lived cash flow shocks the correlation between these shocks. We provide granular estimates of parameters for Compustat firms using a new filter uses only data theoretical restrictions canonical model. As predicted by theory, we find estimated are strongly related liquidity financing ch...

How do firms finance large cash flow requirements? We examine this in the context of firms that are subject to substantial cash flow requirements. We find that trade credit, inventory and cash stock reductions are all important in the short term for mild requirements. Larger and longer cash flow shortages give rise to more equity than debt finance. After the shocks, firms gradually adjust their...

A controversy exists on the use of the investment – cash flow sensitivity as a measure of financing constraints of firms. We re-examine this controversy by analyzing firms affiliated to Indian business groups. We find a strong investment – cash flow sensitivity for both group-affiliated and independent firms, but no significant difference in the sensitivity between them. Additional tests consis...

The cash flow statement is the third principal financial statement in a corporate financial report. It presents the cash inflows and outflows for the period, together with certain net cash flow subtotals, foremost being net cash flow from operating activities (henceforth NCFO). Under the cash flow statement classification rules of both the Financial Accounting Standards Board (FASB Statement No...

maximizing economic earnings is the most common goal in cut-off grade optimization of open-pit mining operations. when this is the case, the price of the product has a critical effect on optimum value of cut-off grade. this paper investigates the relationship between optimum cut-off grade and price to maximize total cash flow and net percent value (npv) of operation. in order to visualize this ...