Credits: 6

Schedule: 29.10.2018 - 10.12.2018

Teacher in charge (valid 01.08.2018-31.07.2020): 

Assistant professor Emma-Riikka Myllymäki and Professor of Practice Jari Melgin


Contact information for the course (applies in this implementation): 

Questions about the course should be asked

    • During the lectures

    • In the course website (in MyCourses) --> General

    Instructors' contact information:

    • Emma-Riikka Myllymäki,, office G3.08, office hours by appointment
    • Jari Melgin,, office H3.35, office hours by appointment

    Teaching Period (valid 01.08.2018-31.07.2020): 

    2018-2019: II (Fall 2018), Töölö Campus

    2019-2020: II (Fall 2019), Otaniemi Campus

    Learning Outcomes (valid 01.08.2018-31.07.2020): 

    After completing the course, students will have knowledge needed in analyzing cash flow information from the perspective of an outside stakeholder. Moreover, students will have knowledge of balance sheet forecasting, liquidity planning and the basics of cash management from the perspective of a company management. Students will also be familiar with the research on cash flows.

    Content (valid 01.08.2018-31.07.2020): 

    The purpose of cash flow analyses; cash flow statement as a part of financial statements; cash flow -based ratios; financial statement users' perspective on cash flow information; the strengths and weaknesses of cash flow information in financial statement analysis; the connection between balance sheet and strategic liquidity planning and short term working capital and cash management; research on cash flows.

    Assessment Methods and Criteria (valid 01.08.2018-31.07.2020): 

    1. Exam (60 points) (60%)
    2. Exercises (40 points) (40%)
    To pass the course, student must obtain:
    a) at least 30 points from the exam, and
    b) at least 50 points from the whole course (exam + exercises).

    Elaboration of the evaluation criteria and methods, and acquainting students with the evaluation (applies in this implementation): 

    Workload (valid 01.08.2018-31.07.2020): 

    - Participation in lectures and in-class exercises, 24 h
    - Self-directed studying incl. preparation for the lectures, exercises, and exam, 132 h
    - Exam, 4 h

    Study Material (valid 01.08.2018-31.07.2020): 

    Readings announced at the beginning of the course.

    Details on the course materials (applies in this implementation): 


    • IAS 7 Statement of Cash Flows.
    • Mackenzie, B., Njikizana, T., Coetsee, D., Chamboko, R.,
      Colyvas, B., Hanekom, B., & Selbst, E. Wiley
      IFRS 2014: Interpretation and Application of International Financial Reporting
      . E-book. Chapter 6: Statement of Cash Flows.
    • Scott, W.R. 2015. Financial
      Accounting Theory
      . 7th edition. Chapter 11: Earnings management.
    • Jury, T.D.H. 2012. Cash
      flow analyses and forecasting: the definitive guide to understanding and using
      published cash flow data.
    • Hales, J., and S. F. Orpurt. 2013. A review of academic
      research on the reporting of cash flows from operations. Accounting Horizons, 27(3): 539-578.
    • Dickinson, V. 2011. Cash flow patterns as a proxy for firm
      life cycle. The Accounting Review 86
      (6): 1969–1994.
    • Orpurt, S. F., and Y. Zang. 2009. Do Direct Cash Flow
      Disclosures Help Predict Future Operating Cash Flows and Earnings? The Accounting Review 84 (3): 893-935.
    • Nwaeze, E. T., S. S. M. Yang, and Q. J. Yin. 2006. Accounting
      Information and CEO Compensation: The Role of Cash Flow from Operations in the
      Presence of Earnings. Contemporary
      Accounting Research
      23 (1): 227-265.
    • Lee, L. F. 2012. Incentives to Inflate Reported Cash from
      Operations Using Classification and Timing. The
      Accounting Review
      87 (1): 1-33.
    • Baños-Caballero, S., P. J. García-Teruel, & P.
      Martínez-Solano. 2010. Working Capital Management in SMEs. Accounting & Finance 50: 511-527.

    Potentially also other articles as defined by the lecturers


    • List of readings
    • Lecture slides
    • Exercises
    • Discussions
      during the lectures and exercises

    • NB! The exam may
      include questions from the reading material that are not covered during the
      lectures. The exam may include questions from the lectures that are not covered
      in the reading material. 

    Substitutes for Courses (valid 01.08.2018-31.07.2020): 

    22C00900 Kassavirta Analyysit.

    Course Homepage (valid 01.08.2018-31.07.2020):

    Prerequisites (valid 01.08.2018-31.07.2020): 

    Introduction to Accounting (22A00100), Introduction to Financial Accounting (22C00100), Financial Accounting (22C00400) and Capstone BSc (22C99904), or comparable courses at another University.

    Grading Scale (valid 01.08.2018-31.07.2020): 


    Registration for Courses (valid 01.08.2018-31.07.2020): 

    Via WebOodi. Please see WebOodi for the registration dates.

    Further Information (valid 01.08.2018-31.07.2020): 

    Maximum amount of students accepted to the course is 60. Attendance on the first lecture is mandatory.

    Additional information for the course (applies in this implementation): 


    • Five (5) exercises in total, and the exercises are discussed in the
      classes. Active class participation is expected.

    • The solutions to the exercises are prepared in a group
      (preferably 3 group members) or individually

    • The course participants form
      the groups themselves.

    • The group itself takes the
      responsibility of ensuring equally distributed workload.


    Details on the schedule (applies in this implementation): 






    • Course info
    • Introduction lecture for cash flow
      analyses (ERM & JM)



    • Principles and preparation of cash
      flow statements
    • Guest Lecturer, KHT Samuli Perälä,



    • Principles and preparation of cash
      flow statements (ERM)
    • Exercise 1. (ERM)



    • Cash flow -based financial figures and ratios (ERM)



    • Cash flows and financial reporting
      quality (ERM)



    • Exercise 2. (ERM)



    • Exercise 3. (ERM)



    • Long term strategic balance sheet
      and liquidity planning



    • Exercise 4. (JM)



    • Short term working capital and
      cash management



    • Exercise 5. (JM)



    •  Course ending (ERM & JM)


    Registration and further information