Analyzing Statements of Cash Flows IILocked: included in All Access

How to read a finished cash flow statement: where the cash comes from and goes, what drives operating cash flow, how to common-size the statement, how to get free cash flow to the firm and to equity from CFO, and how to compute and interpret cash flow performance and coverage ratios.

1. 1. Evaluating sources and uses of cashRead a cash flow statement in four steps: first the big picture of where cash comes from and goes, then the drivers inside operating, investing and financing activities.Locked: included in All Access13 min
2. 2. Common-size cash flow statementsCommon-sizing turns cash flow amounts into percentages, either of total inflows and outflows or of net revenue, so trends and comparisons jump out and forecasts become easier.Locked: included in All Access14 min
3. 3. Free cash flow to the firm and to equityFCFF is the cash left for all capital providers after operating costs, taxes and investment; FCFE is what is left for common shareholders after lenders have also been dealt with.Video · 7 minLocked: included in All Access15 min
4. 4. Cash flow performance ratiosPerformance ratios put CFO over revenue, assets, equity, operating income or shares to show how much operating cash a company squeezes out of each unit of sales or investment.Video · 7 minLocked: included in All Access12 min
5. 5. Cash flow coverage ratiosCoverage ratios divide CFO by what the company owes or wants to spend (debt, interest, new assets, repayments, dividends) to show how comfortably operating cash can pay for each.Locked: included in All Access13 min