Abstract
Analyzing cash flow statements helps users of financial statements obtain the relevant information concerning cash movements in and out of the company in a given financial period. They enable financial analysts to understand the financial sustainability of an MFI as a going concern and the way the cash generated by operations is split between dividend distribution and investment activities on one hand and the way the MFI is financed on the other.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
References
Altman, E.I. (1968). ‘Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy’, The Journal of Finance, XXIII(4), pp. 589–609
Altman, E.I. (2000). ‘Predicting financial distress of companies: revisiting the Z-score and Zeta® Models’, Journal of Banking & Finance, 23, pp. 589–609
Beaver, W.H. (1966). ‘Financial Ratios as Predictors of Failure’, Journal of Accounting Research (Supplement), pp. 71–111
Beisland, L. A. & Mersland, R. (2013) ‘Earnings Quality in the Microfinance Industry’, In Gueyie J.P., Manos R., & Yaron J., Microfinance in developing countries: Issues, policies and performance evaluations. Palgrave Macmillan, USA/UK
Blum, M. (1974). ‘Failing Company Discriminant Analysis’, Journal of Accounting Research, Spring, pp. 1–25
Bogan, L. (2012). ‘Capital structure and sustainability: an empirical study of microfinance institutions’, The Review of Economics and Statistics, 94(4, November), pp. 1045–1058
Carslaw, C. & Mills, J. (1991). ‘Developing ratios for effective cash flow statement analysis’, Journal of accountancy, 127(5, November), pp. 63–70
Caudill, S., Gropper, D., & Hartarska, V. (2009). ‘Which microfinance institutions are becoming more cost effective with time? Evidence from a mixture model’, Journal of Money, Credit and Banking, 41(4, June), pp. 651–672
Casey, C.J. & Bartczak, N.J. (1984). ‘Cash Flow - It’s Not The Bottom Line’, Harvard Business Review, pp. 61–66
Centre for the Study of Financial Innovation (2012). ‘Microfinance Banana Skins 2012’, http://www.csfi.org
Cull, R., Demirguc-Kunt, A., & Morduch, J. (2007). ‘Financial performance and outreach: a global analysis of leading microbanks’, The Economic Journal, 117, pp. F107-F133
Cull, R., Demirguc-Kunt, A., & Morduch, J. (2009). ‘Does regulatory supervision curtail microfinance profitability and outreach?’, World Development, 39(6), pp. 949–965
Cull, R., Demirguc-Kunt, A., & Morduch, J. (2009). ‘Microfinance meets the market’, Journal of Economic Perspectives, 23(1), pp. 167–192
Deakin, E.B. (1972). ‘A Discriminant Analysis of Predictors of Business Failure’, Journal of Accounting Research, pp. 167–179
ECB (2010), ‘Beyond ROE - How to measure bank performance’, 43 pages
European Commission (version as of 24 March 2010), ‘International Accounting Standard 7: Statement of cash flows’
Feibel, B. J. (2003) Investment performance measurement. John Wiley & Sons, Hoboken, USA
Hudon, M., Périlleux, A., & Bloy, E. (2012). ‘Surplus distribution in microfinance: differences among cooperative, nonprofit, and shareholder forms of ownership’, Nonprofit & Voluntary Sector Quarterly, 41(3, June), pp. 386–404
Hudon, M. & Balkenhol, B. (2010) ‘Efficiency’ In Armendáriz, B. and Labie, M. The Handbook of Microfinance, World Scientific Publishing, Singapore, pp. 383–396
IASB (2011). International Accounting Standard 7, ‘Statement of cash flows’.
Jones, F.L. (1987). ‘Current Techniques in Bankruptcy Prediction’, Journal of Accounting Literature, 6, pp. 131–164
Klumpes, P., Welch, P., & Reibel, A. (2009). ‘Bank Cash Flows - A Source of New Insight?’, The Capco Institute Journal of Financial Transformation, pp. 69–78
KPMG (2011), ‘IFRS: Illustrative financial statements: Banks’
Largay, III, J.A. & Stickney, C.P. (1980), ‘Cash Flows, Ratio Analysis and the W.T Grant Company Bankruptcy’, Financial Analysts Journal, pp. 51–54
Ledgerwood, J. & White, V. (2006) Transforming microfinance institutions: providing full financial services to the poor. The World Bank, Washington, DC, USA
Lee, T. (1982), ‘Laker Airways - The Cash Flow Truth’, Accountancy, pp. 115–116
Maes, J. & Reed, L. (2012). ‘State of the Microcredit Summit campaign report 2012’, Micro Credit Summit campaign, Washington DC, USA, http://www.micro-creditsummit.org/resource/46/state-of-the-microcredit-summit.html
Mersland, R. & Strøm, R. 0. (2009). ‘Performance and governance in microfinance institutions’, Journal of Banking & Finance, 33(4), pp. 662–669
Mersland, R. & Strøm, R. Ø. (2010). ‘Microfinance Mission Drift?’, World Development, 38(1), pp. 28–36
Morduch, J. (2000). ‘The microfinance Schism’, World Development, 28(4), pp. 617–630
Neill, J.D., Schaefer, T.F., Bahnson, P.R., & Bradbury, M.E. (1991). ‘The Usefulness of Cash Flow Data: A Review and Synthesis’, Journal of Accounting Literature, 10, pp. 117–150
Norton, C.L. & Smith, R.E. (1979). ‘A Comparison of General Price Level and Historical Cost Financial Statement in Prediction of Bankruptcy’, The Accounting Review, January, pp. 72–87
PricewaterhouseCoopers (2009). ‘Illustrative IFRS consolidated financial statements: Banks’
Rhyne, E. (1998). ‘The Yin and Yang of microfinance: reaching the poor and sustainability’, MicroBanking Bulletin, 2, pp. 6–9
Roberts, P. (2012). ‘The profit orientation of microfinance institutions and effective interest rates’, World Development, 41, pp. 120–131
Schmit & Denuit (2013). ‘Ponzi or not Ponzi in Banking: A cash-flow analysis’, unpublished paper.
Sharma, D.S. (2001). ‘The Role of Cash Flow Information in Predicting Corporate Failure: The State of the Literature’, Managerial Finance, 27(4), pp. 3–28
Schreiner, M. (1969) The Performance of Subsidized Microfinance Organizations: BancoSol of Bolivia and the Grameen Bank of Bangladesh, The Edwin Mellen Press, Lampeter
Sinha, S. (2007). ‘Efficiency with growth: the emerging face of Indian Microfinance’, ADB Finance for the poor, 8(3), pp. 1–11
Strøm, R.Ø., D’Espallier, B., & Mersland, R. (2014). ‘Gender, performance and governance in microfinance institutions’, Journal of Banking & Finance 42(C), pp. 60–75.
Watson, I. (1996). ‘Financial Distress - The State of the Art in 1996’, International Journal of Business Studies, 4(2), pp. 39–65
Zavgren, C.V. (1983). ‘The Prediction of Corporate Failure: The State of the Art’, Journal of Accounting Literature, 2, pp. 1–37
Audited annual reports
Amhara Credit and Savings Institution S.C. (ACSI), Accounts and auditors’ report, 2006–2009, Taddesse Woldegabriel & Co. Chartered Accountants, Addis Ababa, Ethiopia
Asmitha Microfin Limited (AML), Audited financial statements, 2006–2010, Haranath Reddu & Co. Chartered Accountants, Hyderabad, India.
ASA, Auditor’s report and audited consolidated financial statements, 2006–2010, Acnabin Chartered Accountants, Dhaka, Bangladesh
Bancamia, Informe financier, 2008–2010, Deloitte, Bogota, Colombia
Bandhan - Konnagar, Financial Statements, 2006–2010, SRB & Associates Charterd Accountants, Kolkata, India
BASIX, Annual Report, 2006–2010, V. Nagarajan & Co. Chartered Accountants, Hyderabad, India
Banco Caja Social (BCSC), Notas a los Estados Financieros, 2007–2010, KPMG, Bogota, Columbia
BISWA, Audit report, 2006–2009, M. Panigrahu & CO Chartered Accountants, Danipali, India
BRAC, Auditor’s report and audited consolidated financial statements, 2006–2010, Acnabin Chartered Accountants, Dhaka, Bangladesh
BURO Bangladesh, Auditors’ report, 2006–2010, Toha Khan Zaman & CO. Chartered Accountants, Dhaka, Bangladesh
CAPITEC Bank, Integrated Annual Report, 2006–2010, PricewaterhouseCoopers, Cape Town, South Africa
Center for Agriculture and Rural Development, Inc. (CARD NGO), Financial statements and Independent Auditors’ Report, 2006–2010, SGV&Co Ernst & Young, Makati City, Philippines
Cashpor Micro Credit, audited financial statement, 2008–2010, BSR and Company Chartered Accountats, Hyderabad, India
Banco Compartamos S. A., Institucion de banaca Multiple, Estados financieros dictaminados, 2006–2010, PricewaterhouseCoopers Inc, Mexico D.F., Mexico
Crediscotia Financiera S. A., Estados financieros, 2006–2010, KPMG, Lima, Peru
Equity Bank, Annual report and financial statement, 2006–2010, Ernst & Young, Nairobi, Kenya
ESAF Microfinance and Investments Private Limited, Auditors’ report, 2008–2010, A. John Moris & Co., Charterd Accountants, Chennai, India
Financiera Independencia, S. A. B. De C. V., Estados Financieros Consolidados Dictaminados, 2006–2010, PricewaterhouseCoopers, Mexico D.F., Mexico
Fundacion Mundo Mujer, Estados Financieros, 2006–2010, KPMG, Cali, Columbia
Grameen Financial Services Private Limited, Report of the Auditors, 2006–2010, M. S. Kamath & Associates Chartered Accountants, Bangalore, India
Grameen Bank, Auditors’ report, 2006–2010, Acnabin Charterd Accountants, Dhaka, Bengladesh
Khushhali Bank Limited, Financial Statements, 2006–2010, PricewaterhouseCoopers, Islamabad, Pakistan
Kenya Women Finance Trust Deposit Taking Micro Finance Limited (KWFT), Annual report and financial statements, 2007–2010, Deloitte, Nairobi, Kenya
Mibanco, Banco de la Microempresa S.A., Estados financieros con el dictamen de los auditores independientes, 2006–2010, Ernst & Young, Lima, Peru
National Rural Support Programme (NSRP), Financial statements, 2006–2010, Ernst & Young, Islamabad, Pakistan
Share Microfin Limited, Audited Financial statements, 2006–2010, S. R. Batliboi & Co., Mumbai, India
Singhivi Investment & Finance Private Limited (Equitas), Annual report, 20072010, Deloitte Haskins & Sells, Chennai, India
SKS Microfinance, Annual report, 2006–2010, S. R. Batliboi & Co., Mumbai, India
Spandana Sphoorty Financial Limited, Auditors’ report, 2006–010, BSR & Company Chartered Accountants, Hyderabad, India
Ujjivan Financial Services Private Limited, Annual report, 2006–2010, Deloitte Haskins & Selis, Bangalore, India
Editor information
Editors and Affiliations
Copyright information
© 2014 Gautier Dumont and Mathias Schmit
About this chapter
Cite this chapter
Dumont, G., Schmit, M. (2014). What Does MFIs’ Cash Flow Analysis Reveal?. In: Mersland, R., Strøm, R.Ø. (eds) Microfinance Institutions. Palgrave Studies in Impact Finance. Palgrave Macmillan, London. https://doi.org/10.1057/9781137399663_3
Download citation
DOI: https://doi.org/10.1057/9781137399663_3
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-48588-8
Online ISBN: 978-1-137-39966-3
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)