In this session, we continued our discussion of cash flows, by first putting to rest some final issues on earnings, including the tax rate to use in computing after-tax cash flows and dealing with money losing companies. In the process, we did look at what to do about accounting fraud, and while the answer is not much, there may be a role for forensic accounting. To be honest, most forensic accounting books are designed for valuation morticians, but here are a couple that you may find useful: www.amazon.com/Financial-Shenanigans-Accounting-Gimmicks-Reports/dp/0071703071/ref=pd_sim_b_8 www.amazon.com/Creative-Cash-Flow-Reporting-Sustainable/dp/0471469181/ref=pd_sim_b_2 We then moved on to examine broad questions about what to include in capital expenditures and working capital, before putting the cash flow topic to rest by working out debt cash flows and cash flows to equity. Start of the class test: www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/cftests2.pdf Slides: www.stern.nyu.edu/~adamodar/podcasts/valUGspr21/session9slides.pdf Post class test: www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session9Atest.pdf Post class test solution: www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session9Asoln.pdf

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