The statement of cash flows and the solvency of the trading companies of Peru in the period 2010-2015

Abstract

The objective of the investigation was to determine the relationship between the cash flow statement and the solvency of the trading companies in Peru in the periods 2010 to 2015. To determine this relationship, the operation, investment, and financing activities were taken as dimensions with equity indebtedness, total asset indebtedness and hedging of financial expenses. For the study, the descriptive, correlational analysis of non- experimental design was applied with the data of commercial companies that report to the Securities Market Superintendency (SMV) in the quarterly periods of the year 2010-2015. The activity of operation, investment and financing have been used as a measure of the cash flow statement, while equity indebtedness, total asset indebtedness and the coverage of financial expenses obtained are used as an indicator of the solvency of a company. The results reveal the greater the flow obtained from the previous year, the greater the confidence of the banks in the company and, consequently, the greater the possibility of borrowing against third parties and the greater the access to financing, as well; when equity indebtedness and total asset indebtedness are lower, the greater the investment activity. It is recommended that companies in the marketing sector of Peru use EFE as a tool since this tool could be used as an opportunity to obtain external financing and demonstrate the solvency of the company, so it seems convenient to give importance to this financial statement.