New Debt Issued in Compustat
Posted: 25 May 2013 10:23 AM   [ Ignore ]
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Dear Forum members,

I would like to identify the sources of financing of a firm in Compustat annual fundamentals. Measures of internal financing (cash flow) can be constructed using income measures. External equity financing would be the “CSHI - Common Shares Issued” - do you agree with that?

In addition, I want to construct a variable that gives me the amont of new debt a firm raised in a given year. Do you have any suggestions on how to do that?

Thanks,
Chris

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Posted: 26 May 2013 12:08 PM   [ Ignore ]   [ # 1 ]
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hi Chris,

The three subtotals of the cash flow statement in Funda:
OANCF - Operating Activities - Net Cash Flow
IVNCF - Investing Activities - Net Cash Flow
FINCF - Financing Activities - Net Cash Flow

These are well populated (few missings).

If you are working with life cycle stuff, you may appreciate the classifications (using the 3 cash flow variables) into ‘growth’, ‘mature’, etc. in “Cash Flow Patterns as a Proxy for Firm Life Cycle”, 2011, Victoria Dickinson.

Debt (level):
DLTT - Long-Term Debt - Total
DLC - Debt in Current Liabilities - Total

Change:
DLTIS - Long-Term Debt - Issuance—not sure if this is well populated

As an alternative/sensitivity to ‘debt issued’, you could sum operating and investing cash flows (‘free cash flows’), which could be ‘richer’ in the sense that it is 2 sided (positive numbers indicate ‘excess’ cash/cash available to repay debt/dividends; negative numbers indicating funds are needed to sustain operations).

Hope this helps,

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