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October 06, 2021

Categorizing for Clarity: Cash Flow Statement Adjustments to Improve Insight

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October 06, 2021

Categorizing for Clarity: Cash Flow Statement Adjustments to Improve Insight


Consilient Observer

Categorizing for Clarity: Cash Flow Statement Adjustments to Improve Insight

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October 06, 2021

 
 
  • Accounting has not kept pace with the changing economics of businesses, which has created a huge gap between what companies report in their financial statements and what an investor needs to understand a business.
  • To better categorize activities, we suggest making adjustments within the statement of cash flows pertaining to stock-based compensation, leases, and intangible investments.
  • A clearer understanding of the cash in, cash out, and financing activities provides relevance and predictive value beyond the current standards.
  • We share a case study of Amazon for 2020 to make the concepts more concrete
 
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Counterpoint Global consists of 42 people, including 21 investors, five disruptive change researchers, two consilient researchers and two sustainability researchers. Counterpoint Global’s culture fosters collaboration, creativity, continued development, and differentiated thinking.
 
 

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