The numerous bankruptcies and the financial difficulties experienced by American banks and several financial institutions in 2008, a phenomenon that had been overlooked in the analysts' forecasts, point to shortcomings in existing financial analysis techniques. A key question is the following: What is the informative value of the statement of cash flows in predicting the financial distress of a company? This case is intended for MBA or undergraduate students (future managers, investors or auditors) to make sense of cash flows statements and to look at companies' performance beyond statement of earnings. More precisely, the aim of this case is to enhance the informative value of cash flows by doing a thorough analysis of the statements of cash flows disclosed in the three years preceding the 2008 financial crisis by Merrill Lynch & Co.

2008 financial crisis; prediction of banks' financial distress; cash flows statement analysis; Merrill Lynch dismissal; financial statements analysis; banks performance analysis