The cornerstone of cash flow analysis, the Statement of Cash Flows (SCF), helps prevent any unpleasant surprises. The SCF is a reconciliation between net income (from the income statement) and cash flows from operating activities (CFO)used for operations, investing and financing. Ratios using Statement of Cash Flows. The ratios associated with SCF are as follows:
Abbreviations Key
AVE = average
CFO = cash flow from operations
CL = current liabilities
TR = total revenue
NI = net income
Ratios
CFO to CL = CFO
AVE CL
CFO to TL = CFO
AVE TL
Cash Flow Interest Coverage Ratio =
CFO + interest expense/Interest expense
Cash Flow Margin = CFO
TR
Cash Flow = CFO
NI