Statement of Cash Flows

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


 

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