Learn how to evaluate various cash flow patterns.
- The normal pattern of positive inflows … or negative outflows of cash … reported in the cash flow statement is as follows. … Positive cash from operating activities. … Negative cash from investing activities. … And positive or negative cash from financing activities. … Now most companies, over 70% in the United States, … generate positive cash flow from operations. … In fact, suffering several periods … of negative cash from operations … is a short indicator of financial trouble. … In normal times, most companies use cash … to expand or enhance long-term assets. … So cash from investing activities is usually negative … about 85% of the time in the United States. … A company with positive cash from investing activities … is selling off its long-term assets … faster than it's replacing them. … Now predicting whether the sign of cash … from financing activities will be positive or negative … is more difficult. … The sign depends on where the company is, … young and growing or whether it's mature and stable …
Released
3/5/2019- Determine the parts of an income statement.
- Review the different parts of a statement of cash flows.
- Analyze common-size financial statements.
- Define ratio analysis.
- Explain current ratio.
- Distinguish the steps in the operating cycle.
- Examine how to determine the day’s sales in inventory.
- Explore how to calculate the average collection period.
- Identify the fundamentals of analyzing cash flows.
- Explore business valuation while examining the intersection of accounting and finance.
Skill Level Beginner
Duration
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Introduction
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1. Quick Review of Financial Statements
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Review of the balance sheet4m 49s
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2. Analyzing Financial Statements
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3. Ratio Analysis: DuPont Framework
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Ratio analysis3m 27s
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Return on equity2m 26s
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DuPont framework4m 52s
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Current ratio4m 12s
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Debt ratio4m 10s
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Price-earnings ratio3m 39s
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4. Ratio Analysis: The Operating Cycle
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The operating cycle3m 46s
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Days sales in inventory3m 49s
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Average collection period3m 31s
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Days purchases in payable3m 28s
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Real world: Procter & Gamble3m 21s
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5. The Statement of Cash Flows
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Analyzing cash flows2m 22s
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What does it tells us?4m 21s
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Cash flow patterns2m 32s
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One method of analysis4m 37s
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Two methods for presentation4m 14s
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6. Forecasting Financial Statements
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The initial assumptions1m 48s
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Forecasted retained earnings2m 25s
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Forecasted assets2m 42s
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7. Intro to Business Valuation
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8. Valuation: Using Multiples
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The Microsoft IPO3m 46s
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Earnings multiples3m 32s
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Equity multiples3m 38s
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Sales multiples4m 23s
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9. Valuation: Free Cash Flows
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Buying the Hong Kong car?2m 26s
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Risk and interest rates3m 44s
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Forecasting cash flows4m 22s
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10. Valuation: Comparing Models
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Brief McDonald's history2m 53s
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McDonald's: The numbers2m 41s
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Conclusion
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Next steps3m 4s
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Video: Cash flow patterns