Financial Quality

Most stakeholders in a business corporation or company is interested at the uninterrupted flow of cash towards returns on assets and capital equity, available for distribution as profits share or dividends, as surplus earnings. There may be few who opt to reinvest to noncash assets and even borrow additional capitalizations for expansion, growth, and higher future profits. But, the target is one. Certainly, that would be surplus cash flow directed towards returns on assets and capital equity. Thus, to know the real figures of cash flow and profitability, equity forecasters and credit forecasters prepare financial statements of interested companies or corporations. Topping it all, the finer aspect of a company’s source of consistent or sustained cash flow will be revealed in bold figures (Comiskey & Mulford, 2002).