Understanding Cash Flow Games Companies Play

Course Overview

This course looks at the ways companies can influence operating cash flow and make liquidity appear stronger than it really is. It covers common methods, including reclassifying activities, factoring receivables, and using supplier finance programs. Timing-based tactics, such as accelerating collections or delaying payments, are also reviewed. The course examines how transaction structures, prepayments, and other arrangements can affect cash flow. Finally, it highlights disclosure and presentation practices that can hide liquidity issues, including selective narrative disclosures and the use of non-GAAP measures.  

Learning Objectives

Upon completion of this course, you will be able to:

• Identify ways cash flow can be misclassified or timed to make liquidity appear stronger

• Recognize the impact of reclassifying activities, factoring, and supplier finance on operating cash flow

• Differentiate routine cash management from strategies designed to manipulate liquidity

• Determine how transaction structuring, prepayments, and staged arrangements can affect reported cash flow

• Identify disclosure and presentation practices that can obscure cash flow trends

• Recognize the effect of aggregation and non-GAAP measures on interpreting liquidity

• Distinguish legitimate financial reporting choices from techniques intended to mislead