Cash Flow Statement Flashcards

Flashcards about cash flow statements and related concepts.

Cash Flow Statement

Summarizes the amount of cash and cash equivalents entering and leaving a company.

Cash Flow Statement

Highlights a company's cash management, including how well it generates cash.

Cash Flow Statement

Complements the balance sheet and the income statement.

Main components of the Cash Flow Statement

Operating activities, investing activities, and financing activities.

Two methods of calculating cash flow

The direct method and the indirect method.

OPERATING CASH FLOW (CFO)

Amount of money a company generates from its ongoing, regular business activities.

CASH FLOW FROM INVESTMENT ACTIVITIES (CFI)

Cash generated or consumed from various investment-related activities.

CASH FLOW FROM FINANCIAL ACTIVITIES (CFF)

Net flow of cash that is used to finance the company.

CASH FLOW FROM FINANCIAL ACTIVITIES (CFF)

Provides investors with insight into a company’s financial strength and how well a company's capital structure is managed.

Operating Cash Flow

Amount of money a company generates from its ongoing, regular business activities, such as manufacturing and selling goods/services.

Cash flow from Investment Activities

Cash generated or consumed from various investment-related activities (need for operating working capital and investments in fixed assets).

Cash Flow from Financial Activities

Net flow of cash that is used to finance the company. Financing activities include transactions involving debt, equity, and dividends.

Operating Cash Flow

Also called net cash from operating activities or net cash from operations. The operating cash flow margin is expressed in percentage of revenue.

Free Cash Flow

Represents the cash a company has available to pay dividends, repurchase stock, pay off debt, or make acquisitions. The free cash flow margin is expressed in percentage of revenue.

Operating cash flow to total debt

A higher ratio indicates that the company is generating enough cash from its operations to pay off its debt.