THE ROLE OF CASH FLOW STATEMENT IN THE ANTICIPATION OF BANKRUPTCY: THE CASE OF BANCO PRIVADO PORTUGUÊS

Authors

  • Maria Teresa Venâncio Dores Alves Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.
  • Carlos Manuel Severino da Mata Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.
  • Sandra Cristina Dias Nunes Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.

DOI:

https://doi.org/10.4270/ruc.20153190-210

Keywords:

Cash flow Statement, Bankruptcy, Altman’s Models

Abstract

The Cash flow has been acknowledged both in the literature and in the accounting standards as one of the fundamental pieces so that financial information may achieve its utmost goal of being useful for those who use it. According to IAS 7 Cash flow Statement (1994) from IASB, this financial statement may be an instrument able to allow the assessment of the time and in which measure the entity is able to generate monetary resources and also to understand with reasonable certainty the possibility of such generation. Like Le Maux and Morin (2011) in the study of the case of Lehman Brothers, the purpose of this study is to try to verify if BPP bankruptcy could have been predicted, mainly by means of the cash flow statements. The following research methods were used: quantitative, qualitative, descriptive, explanatory, bibliographical, documentary and, also, of case study. We have used primary and secondary data. In the case of BPP the cash flow statements, in the period from 2005 to 2007, according to Le Maux e Morin (2011), were strong predictors of the 2008th bankruptcy, as they had emitted clear signs of eminent financial distress  from 2006 on. Thus, they have demonstrated a great informative potential and value for investors and analysts. Also, a set of predictive models were applied whose results pointed to a clear situation of bankruptcy in the future.

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Author Biographies

Maria Teresa Venâncio Dores Alves, Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.

Doutora em Gestão, especialidade Contabilidade, Professora Coordenadora da Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.

Carlos Manuel Severino da Mata, Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.

Mestre em Gestão, Professor Adjunto da Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.

Sandra Cristina Dias Nunes, Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.

Doutora em Matemática, Especialidade em Estatística, Professora Coordenadora da Escola Superior de Ciências Empresariais do Instituto Politécnico de Setúbal.

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Published

2015-11-27

How to Cite

Alves, M. T. V. D., Mata, C. M. S. da, & Nunes, S. C. D. (2015). THE ROLE OF CASH FLOW STATEMENT IN THE ANTICIPATION OF BANKRUPTCY: THE CASE OF BANCO PRIVADO PORTUGUÊS. Revista Universo Contábil, 11(3), 190–210. https://doi.org/10.4270/ruc.20153190-210

Issue

Vol. 11 No. 3 (2015)

Section

International Section

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