Whether you are an investor, financial planner or analyst, learning more about equity cash flow could help you make investment recommendations and strategies. Equity cash flow is one type of cash flow measurement that calculates how much money a company has available to pay its stock shareholders. If all three ratios are aligned, we can confirm that the company has high operating cash efficiency in its business operations.Cash flow is an important financial concept that measures how money moves in and out of an organization. If the company has a high cash flow to net income ratio, do check if the company also have a high receivables turnover ratio and/or a low accounts payable turnover ratio. It will be more helpful to look at other financial ratios as well in order to reach to a conclusion more accurately. In general, cash flow to net income ratio is not a very accurate financial ratio for analysts and investors to use as on a standalone basis. Limitations of Cash Flow to Net Income Ratio
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