Statement of Cah Flows and Ratios

Statement of Cash Flows

Tells us where our cash comes from

Operating Cash Flows

Money earned from company operations

Investing Csh Flows

Money earned from buying stock or investing in capital

Financing Cash Flow

Money earned from lending with interest

Any increase in assets means…

A decrease in cash

Items under OCF:

Net income, depreciation, amortization, change in A/R, change in Inventory, change in A/P, change in Interest payable, change in Accrued Wages, change in Prepaid Expense, change in Unearned Revenue

Items in ICF:

Change in PPE, change in Marketable Securities, change in Intangibles, change in Short Term Investments

Items in FCF:

Change in Loan Payable, change in Common Stock, Paid Dividends, change in Short and Long term notes, change in Treasury Stock, change in Short Term Debr

How to calculate change in Intangibles

Beginning Intangible + New Purchase = Ending

Calc Dividends

Beginning R/E + Net Income - Dividends = Ending R/E

Return on Investment (ROI)

Net Income / Shareholders’ Equity

Return on Equity (ROE)

Net Income / Stockholders’ Equity

Return on Assets (ROA)

Net Income / Assets

Financial Leverage

Assets / Stockholders’ Equity

ROA Def

Profits earned in relation to all capital supplied by creditors and owners; performance metric, how proficient a company is at using its assets to generate profit

Financial Leverage Def

How much debt is being used to finance the company’s assets; debt metric

Profit Margin

Net income / Sales

Asset Turnover

Sales / Assets

Gross Margin

Gross Profit / Revenue

SGA Expense Margin

SGA Expense / Revenue

Operating Margin

Operating / Revenue

PPE Turnover

Revenue / Net PPE

Days in Inventory

365 x (Inventory / COGS)

Days in Receivables

365 x (Accounts Receivables / Revenue)

Days in Payables

365 x (Accounts Payable / Revenue)

Times Interest Earned

EBIT / Interest Expense