Join Jim Stice for an in-depth discussion in this video Company A: Help!, part of Running a Profitable Business: Understanding Cash Flow.
- For a few minutes,…we are going to pretend that we are bankers.…We are going to look at the cash flow statements…for four companies, and using those cash flow data,…determine to which one…of the companies we should give a loan.…Now, don't worry too much about the loan.…Let's assume that it's a responsible amount…for all four companies.…Also, we are not allowed…to adjust the interest rate for risk.…The interest rate is the same, no matter which one…of the four companies receives the loan.…So, we are bankers, and we are going…to analyze the cash flow statements of four companies.…
Now, here's the first cash flow statement for Company A.…So, look down through there.…Lots of good numbers there,…but what's the most important number to look at…in the statement of cash flows?…Answer: operating cash flow.…This is the first number at which we should look…when we look at a statement of cash flows.…What's the most important relation…in a statement of cash flows?…Answer: the relation between the magnitude…of operating cash flow…
Want to hear more from Jim and Kay? Learn about all three types of accounting—financial, managerial, and income tax—in their Accounting Fundamentals course.
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- Differentiating between net income and operating cash flow
- Categorizing cash flow
- Using financial data to deduce cash flow
- Managing operating, investing, and financing cash flows
- Typical cash flow patterns
- Converting net income into operating cash flow
- Improving operating cash flow
Skill Level Intermediate
1. The Importance of Cash Flow Analysis
2. Overview of the Statement of Cash Flows
3. Using Cash Flow Data to Make a Loan Decision
4. Converting Income Statement Data into Operating Cash Flow Data
5. Managing Cash Flow
6. Cash Flow Numbers for Some Real Companies
The danger of free cash flow3m 56s
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