Cash flow statement analysisIn contrast to profits which are subject to accounting policies and can be distorted by both accounting guidance and management decisions the cash flow statement is based on the reality of cash generated and cash used during the period under review. As a result, you will often place greater reliance on cash flow numbers. Perform analysis on the cash flow statement, examples of which may include:•Major uses and sources of cash•Key cash flow items•Cash coverage ratio•Cash conversion ratio•Free cash flow
Cash flow statement analysisIn contrast to profits which are subject to accounting policies and can be distorted by both accounting guidance and management decisions the cash flow statement is based on the reality of cash generated and cash used during the period under review. As a result, you will often place greater reliance on cash flow numbers. Perform analysis on the cash flow statement, examples of which may include:•Major uses and sources of cash•Key cash flow items•Cash coverage ratio•Cash conversion ratio•Free cash flow