One of the most common myths in corporate finance and financial statement analysis is that while income statements and balance sheets tend to be incomparable and may be manipulated, reported corporate cash flows are immune to such distortions. However, this is not true, since there exist multiple factors that may introduce a lot of “noise” into published cash flow statements. In this lecture some of the most common pitfalls of analyzing corporate cash flows will be discussed.

Jacek Welc is an Assistant Professor at Wroclaw University of Economics, Poland, and a lecturer in corporate finance at SRH Berlin University of Applied Sciences, Germany. He owns PhD in econometrics as well as LCCI (London Chamber of Commerce and Industry) Diploma in Managerial Principles and LCCI Level 4 Certificate in Financial Accounting. From 2003 to 2007, he was an independent consultant in the areas of corporate valuation, management accounting, and financial accounting. Then he served as Head of the Corporate Finance Department at Dexus Partners (a brokerage house operating at Warsaw Stock Exchange) and consulting manager at PKF Polska (an auditing company). Jacek now co-owns a consultancy specializing in corporate financial services rendered to companies listed on Warsaw Stock Exchange. In his academic work Jacek specializes in financial accounting quality, with the focus on reliability and comparability of published corporate financial reports. He published more than thirty research papers and presented his research finding on multiple academic conferences worldwide (with several awards for his empirical studies). As a guest lecturer he taught financial statement analysis at business schools in sixteen countries. In November 2020 Jacek published his new book, titled “Reading Between the Lines of Corporate Financial Reports. In Search of Financial Misstatements” (Palgrave Macmillan). Privately Jacek is a keen mountain hiker (more than 1000 km walked each spring /summer season), reader of books on history of Europe and, recently, a piano player (or, rather, would-be piano player).