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Cash Flow Analysis
- The effects
of growth on
cash flow and earnings
- How free cash flow
benefits investors
- Don’t blame EBITDA for
your losses
- The borrowing base
impacts cash flow and equity
- The debt repayment
schedule can predict a
liquidity crisis
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Cash Flow Analysis
Companies that consistently generate positive cash flow are
usually, over a period of time, good stock market performers. The adage that
“cash is king” is so true. Wall Street, however, is often preoccupied with
earnings, and sometimes forgets that it’s cash flow that ultimately builds
long-term wealth, not accounting income. The subtle difference between cash
flow and earnings can be the edge that investors need to see a clear path to
profits. This section will discuss five easy concepts that will help in
understanding how cash flow can effect a company’s stock value.
5 Investment Concepts
- The effects
of growth on cash flow and earnings
- How free cash flow benefits investors
- Don’t blame EBITDA for your losses
- The
borrowing base impacts cash flow and equity
- The debt
repayment schedule can predict a liquidity crisis
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