Cash Flow Reporting by Financial Companies: A Look at the Commercial Banks

Show full item record

Please use this identifier to cite or link to this item: http://hdl.handle.net/1853/29098

Title: Cash Flow Reporting by Financial Companies: A Look at the Commercial Banks
Author: Mulford, Charles W. ; Comiskey, Eugene E.
Abstract: In this research report we survey the cash flow reporting practices for a sample of fifteen of the largest, independent and publicly-traded U.S. commercial banks. In the process, we find many reasons why cash flows are typically not important measures of financial performance for the banks. For our sample, we adjust reported operating cash flows for classification differences, for non-cash transfers of loans and investments between categories that impact operating cash flow, and for the effects of acquisitions. In the adjustment process we find some notable changes to operating cash flow. In particular, we see declines in adjusted operating cash flow for Bank of America, JP Morgan Chase and Wells Fargo, and increases in adjusted operating cash flow for Citigroup, Fifth Third Bancorp, KeyCorp, PNC Financial and SunTrust Banks. We seek your comments on how bank cash flows should be measured. Analysts who evaluate the financial performance of commercial banks will want to give consideration to adjustments such as these when examining bank finances. Bank regulators and the FASB may also want to consider these adjustments and the somewhat limited disclosures of information relevant for the adjustments that are presently provided by the banks. More detailed information on items such as brokered deposits and acquisition-related cash flows would be helpful.
Type: Technical Report
URI: http://hdl.handle.net/1853/29098
Date: 2009-07
Contributor: Georgia Institute of Technology. College of Management
Georgia Institute of Technology. Financial Analysis Lab
Publisher: Georgia Institute of Technology
Subject: Economics

All materials in SMARTech are protected under U.S. Copyright Law and all rights are reserved, unless otherwise specifically indicated on or in the materials.

Files in this item

Files Size Format View
ga_tech_cf_bank_2009.pdf 327.1Kb PDF View/ Open

This item appears in the following Collection(s)

Show full item record