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Abstract
The rapid growth and greater competition among casinos has resulted in a number of firms being financially impaired while others are being forced into mergers and consolidations. Many US gaming regulators have adopted regulations for monitoring the financial stability of casino properties. These regulators typically use financial statement analysis tools for measuring the financial stability of the gaming properties. This has traditionally consisted of measures derived from the income statement and balance sheet while ignoring the statement of cash flows. At this time, there is little information on how to read the statement of cash flow, let alone how to analyze this statement. While prior studies have been mixed on the informational content of cash flow information, they conclude that cash flow information does help explain many of the changes in the balance sheet and income statement and thus helps in the understanding of changes that have taken place in a corporation. This type of information should lead to a better understanding of the financial stability of gaming properties. The use of cash flow ratios along with the traditional ratios should provide additional assurances about the liquidity and solvency of gaming corporations.