Cash Flow Statement (Factset)

GAAP/IFRS Cash Flow Statement

FactSet's standardized statement showing how cash moved in and out of the company each year, split into operating, investing, and financing activities. Example: Cash rises $70,000: +$240,000 operating, −$115,000 investing, −$50,000 financing, and −$5,000 from exchange rates. Formula: Net change in cash = Net operating cash flow + Net investing cash flow + Net financing cash flow + Exchange rate effect

FactSet Units and Signs

FactSet figures are in millions of U.S. dollars except per-share items; negative (red) numbers are cash outflows and positive numbers are cash inflows. Example: Capital expenditures of −60.0 means $60 million of cash was spent. Formula: Reported figure × 1,000,000 = Actual dollars

Operating Activities

Cash flows from the company's everyday business, such as collecting from customers and paying suppliers and employees. Example: The company's operating activities bring in $240,000. Formula: Net operating cash flow = Funds from operations + Changes in working capital

Indirect Method

The format FactSet uses: start with net income, then add back non-cash items and adjust for working capital changes. Example: $200,000 net income becomes $240,000 of operating cash after adjustments. Formula: Operating cash flow = Net income + Non-cash items ± Changes in working capital

Net Income / Starting Line

Net income from the income statement, which starts the cash flow statement. Example: $200,000, the same as the income statement. Formula: Taken directly from the income statement

Depreciation, Depletion & Amortization

Non-cash expenses added back because they lowered net income without using cash; depletion is the version used for natural resources like oil or minerals. Example: $15,000 depreciation + $5,000 amortization = $20,000 added back. Formula: DD&A = Depreciation and depletion + Amortization of intangible assets

Depreciation and Depletion

The non-cash depreciation (and depletion, for natural resources) added back to net income. Example: $15,000 added back. Formula: Added back to net income

Amortization of Intangible Assets

The non-cash amortization of intangibles added back to net income. Example: $5,000 added back. Formula: Added back to net income

Deferred Taxes & Investment Tax Credit

The part of income tax expense that wasn't paid in cash this year (added back) or a deferred tax benefit (subtracted), plus any investment tax credits. Example: $3,000 of deferred tax expense is added back because it won't be paid until later. Formula: Add deferred tax expense, subtract deferred tax benefit

Deferred Taxes

The deferred tax adjustment on its own. Example: $2,000 deferred domestic + $1,000 deferred foreign = $3,000. Formula: Part of deferred taxes & investment tax credit

Other Funds (Operating)

Other non-cash items FactSet groups together, which can include stock-based compensation, impairments, and other non-cash charges or gains. Example: $30,000 of impairments + $7,000 of stock-based compensation = $37,000 added back. Formula: Added to (or subtracted from) net income as a non-cash adjustment

Funds from Operations

Operating cash flow before working capital changes; shows cash earnings from the business. Example: $200,000 + $20,000 + $3,000 + $37,000 = $260,000. Formula: Funds from operations = Net income + DD&A + Deferred taxes + Other funds

Changes in Working Capital

Adjustments for changes in current assets and liabilities, showing timing differences between recording income or expenses and moving cash. Example: −$20,000 − $15,000 + $10,000 + $3,000 + $5,000 − $3,000 = −$20,000. Formula: Increase in current asset = subtract; Decrease in current asset = add; Increase in current liability = add; Decrease in current liability = subtract

Receivables (Cash Flow)

The cash effect of changes in receivables; an increase is negative because sales were made but cash wasn't collected yet. Example: Receivables rise from $80,000 to $100,000, so −$20,000. Formula: Cash effect = −(Ending receivables − Beginning receivables)

Inventories (Cash Flow)

The cash effect of changes in inventory; buying more inventory uses cash. Example: Inventory rises from $105,000 to $120,000, so −$15,000. Formula: Cash effect = −(Ending inventory − Beginning inventory)

Accounts Payable (Cash Flow)

The cash effect of changes in payables; an increase is positive because the company held on to cash it owes suppliers. Example: Payables rise from $70,000 to $80,000, so +$10,000. Formula: Cash effect = Ending AP − Beginning AP

Income Taxes Payable (Cash Flow)

The cash effect of changes in taxes owed; an increase is positive because taxes were recorded but not yet paid. Example: Taxes payable rise from $7,000 to $10,000, so +$3,000. Formula: Cash effect = Ending taxes payable − Beginning taxes payable

Other Accruals

The cash effect of changes in accrued liabilities like wages and bonuses; an increase is positive. Example: Accrued payroll rises from $25,000 to $30,000, so +$5,000. Formula: Cash effect = Ending accruals − Beginning accruals

Other Assets/Liabilities

The cash effect of changes in all other operating assets and liabilities. Example: Prepaid expenses rise by $3,000, so −$3,000. Formula: Increase in assets or decrease in liabilities = negative; the reverse = positive

Working Capital Changes vs. Balance Sheet

Cash flow working capital changes often don't exactly match balance sheet differences because of exchange rates, acquisitions, and reclassifications. Example: Receivables rise $25,000 on the balance sheet, but $5,000 came with a company that was acquired, so the cash flow line shows only −$20,000. Formula: Balance sheet change = Cash flow change + Non-cash effects (FX, acquisitions, other)

Net Operating Cash Flow

Total cash generated by the core business; usually the most important line on the statement. Example: $260,000 − $20,000 = $240,000. Formula: Net operating cash flow = Funds from operations + Changes in working capital

Investing Activities

Cash flows from buying and selling long-term assets, businesses, and investments. Example: The company uses $115,000 on equipment, an acquisition, and investments. Formula: Net investing cash flow = Capex + Acquisitions + Sales of assets + Net purchase/sale of investments + Other funds

Capital Expenditures

Cash spent buying or improving long-term assets. Example: −$50,000 fixed assets + (−$10,000) other assets = −$60,000. Formula: Capital expenditures = Capex (fixed assets) + Capex (other assets)

Capital Expenditures (Fixed Assets)

Cash spent on property, plant, and equipment like buildings and machinery. Example: The company buys a $50,000 machine. Formula: Approx. = Ending gross PP&E − Beginning gross PP&E + Disposals

Capital Expenditures (Other Assets)

Cash spent on other long-term assets, such as software or intangibles. Example: The company pays $10,000 for new accounting software. Formula: Part of capital expenditures

Capex to Depreciation

Compares spending on assets to depreciation; above 1 suggests the company is growing its asset base. Example: $60,000 ÷ $20,000 = 3.0. Formula: Capex ÷ Depreciation & amortization

Capex as % of Sales

How much of sales is reinvested in long-term assets. Example: $60,000 ÷ $1,000,000 = 6%. Formula: Capex ÷ Sales × 100

Net Assets from Acquisitions

Cash spent buying other companies. Example: The company buys a small competitor for $40,000 in cash. Formula: Purchase price paid in cash − Cash acquired with the business

Sale of Fixed Assets & Businesses

Cash received from selling equipment, property, or business units. Example: An old truck with a $4,000 book value sells for $5,000. Formula: Proceeds = Book value of asset + Gain (or − Loss)

Purchase/Sale of Investments

The net cash effect of buying and selling investments. Example: $10,000 from selling bonds − $30,000 spent buying bonds = −$20,000. Formula: Net = Sale/maturity of investments − Purchase of investments

Purchase of Investments

Cash spent buying investments such as bonds or securities; FactSet shows it as a positive amount even though it is cash going out. Example: The company buys $30,000 of bonds. Formula: Subtracted in purchase/sale of investments

Sale/Maturity of Investments

Cash received from selling investments or when they mature. Example: A $10,000 bond matures and the company gets its cash back. Formula: Added in purchase/sale of investments

Other Funds (Investing)

Other investing cash flows that don't fit elsewhere. Example: $1,000 received from an insurance claim on damaged equipment. Formula: Part of net investing cash flow

Net Investing Cash Flow

Total cash used in or provided by investing; usually negative for a company that is reinvesting. Example: −$60,000 − $40,000 + $5,000 − $20,000 = −$115,000. Formula: Net investing cash flow = Sum of all investing lines

Financing Activities

Cash flows between the company and its owners and lenders, such as stock buybacks, stock issuance, borrowing, debt repayment, and dividends. Example: The company uses $50,000 on buybacks and dividends, partly offset by new stock and borrowing. Formula: Net financing cash flow = Change in capital stock + Net issuance/reduction of debt − Dividends paid + Other financing

Change in Capital Stock

Net cash from issuing stock minus cash spent buying it back. Example: $10,000 from selling stock − $50,000 for buybacks = −$40,000. Formula: Change in capital stock = Sale of stock − Repurchase of stock

Repurchase of Common & Preferred Stock

Cash spent buying back the company's own shares; creates treasury stock. Example: 2,000 shares × $25 = $50,000. Formula: Cash paid = Shares repurchased × Price per share

Sale of Common & Preferred Stock (Proceeds from Sale of Stock)

Cash received from issuing new shares, often from employees exercising stock options. Example: Employees exercise options for 1,000 shares at $10 each, bringing in $10,000. Formula: Cash received = Shares issued × Issue price

Issuance/Reduction of Debt, Net

Net cash from borrowing minus debt repaid. Example: $30,000 new loan − $20,000 repaid = +$10,000. Formula: Net = Debt issued − Debt repaid

Change in Other Debt

FactSet's detail line for net borrowing or repayment of debt. Example: +$10,000. Formula: Part of issuance/reduction of debt, net

Cash Dividends Paid

Cash paid to shareholders; reported in financing activities. Example: $0.20 per share × 100,000 shares = $20,000. Formula: Dividends paid = Dividend per share × Shares outstanding

Net Financing Cash Flow

Total cash from or used in financing. Example: −$40,000 + $10,000 − $20,000 = −$50,000. Formula: Net financing cash flow = Sum of all financing lines

Exchange Rate Effect

The change in the dollar value of cash held in foreign currencies caused by exchange rate movements. Example: The euro weakens, so the company's euro bank account is worth $5,000 less in dollars. Formula: Change in exchange rates × Foreign currency cash balances

Net Change in Cash

The total increase or decrease in cash for the year; it matches the change in cash on the balance sheet. Example: $240,000 − $115,000 − $50,000 − $5,000 = +$70,000, taking cash from $70,000 to $140,000. Formula: Net change in cash = Net operating + Net investing + Net financing + Exchange rate effect

Free Cash Flow

Cash left from operations after spending on fixed assets; FactSet subtracts fixed-asset capex. Example: $240,000 − $50,000 = $190,000. Formula: Free cash flow = Net operating cash flow − Capital expenditures (fixed assets)

Free Cash Flow per Share

Free cash flow for each common share. Example: $190,000 ÷ 100,000 shares = $1.90. Formula: FCF per share = Free cash flow ÷ Shares outstanding

Free Cash Flow Yield

Free cash flow as a percentage of the company's market value; higher means more cash generated per dollar of stock price. Example: $190,000 ÷ $3,800,000 market cap = 5%. Formula: FCF yield = Free cash flow ÷ Market capitalization × 100 (or FCF per share ÷ Share price × 100)

Free Cash Flow Margin

The percentage of sales that becomes free cash flow. Example: $190,000 ÷ $1,000,000 = 19%. Formula: FCF margin = Free cash flow ÷ Sales × 100

Free Cash Flow Conversion

How much of net income turns into free cash flow; close to or above 1 is strong. Example: $190,000 ÷ $200,000 = 0.95. Formula: FCF conversion = Free cash flow ÷ Net income

Quality of Earnings Ratio

Compares operating cash flow to net income; above 1 suggests profits are backed by real cash. Example: $240,000 ÷ $200,000 = 1.2. Formula: Quality of earnings = Net operating cash flow ÷ Net income

Operating Cash Flow Ratio

Whether operating cash can cover current liabilities. Example: $240,000 ÷ $160,000 = 1.5. Formula: Operating cash flow ratio = Net operating cash flow ÷ Total current liabilities

Cash Flow Margin

The percentage of sales that becomes operating cash. Example: $240,000 ÷ $1,000,000 = 24%. Formula: Cash flow margin = Net operating cash flow ÷ Sales × 100