【正文】 a declining firm may have declining earnings but throw out large amount of cash due to lack of investing opportunities Earnings management reason:A firm may manage the noncash earnings to increase earnings, but not to increase cash flow. Cash flow pattern for different firms Cash flow from: A B C D Operation $ (3) $ 7 $ 15 $ 8 Investing (15) (12) (8) (2) Financing 18 5 (7) (6) Net CF 0 0 0 0 New, growing firm Growing less rapidly Mature, stable firm Declining firm Is cash the king?Sloan [1996] Accounting Review Is cash the king?Sloan [1996] Accounting Review Is cash the king?Sloan [1996] Accounting Review Is cash the king?Barth el al. (2023) Investing Motto You can pocket cash, but you can not pocket earnings! myself 。On Project Report/Readings 1. Market value, use number of shares outstanding, do not use average number of shares outstanding 2. Identify source of data or quotes 3. Common size analysis, show amounts and percentages 4. Only analyze notes that are related to our current lecture 5. Take turn to write the report, do not leave to one person 6. In final exams, I may provide you with raw materials and a sample article from our readings for you to analyze the raw materials and write a similar article. So get familiar with all articles. Again, understand but do not memorize. Firm Names Eagle Eye: Valuation Analysis Strategy Investorium Statement of Cash Flow Cash flow from Operating activities: （ 營運活動） cash receipts from customers cash disbursed to: suppliers of merchandise employees for salaries Cash flow from investing activities: （ 投資活動） purchase of buildings, equipments