Cash flow describes the movement of cash into and out of a company. We'll build on top of what we learned in the previous course on Earnings Power and bridge from accounting profits to the actual amount of cash flow generated by the company.
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Hey, I’ve heard that there are two models of a cash flow statement : direct and indirect. Could you tell us how we could convert a cash flow statement from indirect to direct and vice versa
hey guys are you working on it?
Hi Nicholas, for the purpose of investment analysis, you don’t need to convert a cash flow statement from indirect to direct. That’s irrelevant and not something even considered in investment analysis. Analysts just work off of the cash flow statement provided by the companies under IFRS / US GAAP.
yeah, but I found a company, but it reports their cash flow statement in direct method. What should I do to analyze the company?
You’ll have to rely in your own judgement. It’s hard for us to comment what you should do.