Overview
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Improve your understanding of financial documents with this deep dive into the statement of cash flows financial document.
Syllabus
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Introduction
- The statement of cash flows
- Three cash flow categories: Operating, investing, financing
- Typical cash flow patterns
- Difference between net income and operating cash flow
- The operating cash flow matrix
- Sales and cash collected from customers
- Wage expense and cash paid to employees
- Cost of goods sold and cash paid to suppliers
- Cash paid for interest, income taxes, and rent
- Depreciation expense
- Format of the direct method
- Using direct-method data: Time-series analysis
- Format of the indirect method
- Indirect method: Easier to create
- Indirect method: A wealth of insights
- Primary investing activities: Fixed asset purchases/sales
- Other investing activities: Investment securities
- Financing activities: Loans, repayments, and refinancing
- Financing activities: Share issuance, dividends, repurchases
- Operating cash flow: Important statement of cash flows row
- Free cash flow: Other important statement of cash flows row
- Monitoring differences between net income and cash flow
- Total change in cash: Established company vs. startup
- General Motors: Cash flow death
- JCPenney: Zero free cash flow is not sustainable
- Tesla: Growth company, negative to positive free cash flow
- Beyond Meat: Growth company, negative free cash flow
- Apple: A cash cow
- What is your favorite financial statement?
