Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

20 HIGHLIGHTS FOR

CASH FLOW
ANALYSIS
 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

1
Cash flow analysis is the process of
examining a company's cash inflows
and outflows to determine its financial
health.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

2
Cash flow analysis is typically done by
analyzing a company's cash flow
statement.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

3
The purpose of cash flow analysis is to
determine whether a company has
enough cash on hand to meet its
obligations, such as paying its bills and
debts, and to fund its operations.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

4
Cash flow analysis helps investors
and analysts understand a
company's liquidity and solvency,
and to evaluate its ability to
generate cash in the future.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

5
There are several methods of cash
flow analysis, including ratio
analysis, trend analysis, and cash
flow forecasting.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

6
Ratio analysis involves comparing
different measures of cash flow,
such as operating cash flow to net
income, to evaluate a company's
financial health.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

7
Trend analysis involves comparing
a company's cash flow over time to
identify patterns or changes in its
cash flow.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

8
Cash flow forecasting involves
projecting a company's future cash
flows based on past performance
and expected changes in its
business.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

9
Cash flow analysis is an important
tool for managers, as it helps them
monitor cash flows and identify
areas where cash is being
generated or used inefficiently.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

10
cash flow analysis is also
important for investors, as it helps
them evaluate a company's
financial health and make
informed investment decisions.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

11
cash flow analysis is often used in
conjunction with other financial
analyses, such as income
statement analysis and balance
sheet analysis, to provide a more
complete picture of a company's
financial health.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

12
One of the key metrics used in cash
flow analysis is free cash flow,
which is the cash a company
generates after accounting for
capital expenditures.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

13
Free cash flow is important
because it represents the cash a
company can use to pay dividends,
buy back shares, pay down debt, or
invest in growth opportunities.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

14
Another important metric used in
cash flow analysis is cash
conversion cycle, which measures
the time it takes for a company to
convert its investments in
inventory and receivables into
cash.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

15
The cash conversion cycle is
important because it can impact a
company's liquidity and ability to
meet short-term obligations.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

16
Cash flow analysis can be used to
identify potential warning signs of
financial distress, such as
declining cash flows, negative free
cash flow, or increasing debt
levels.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

17
Cash flow analysis can also be used
to evaluate the impact of changes
in a company's operations or
capital structure on its cash flow,
such as changes in pricing, product
mix, or financing arrangements.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

18
cash flow analysis is a useful tool
for assessing the financial health
of potential acquisition targets or
investment opportunities, as it
provides insights into their cash-
generating capabilities and ability
to fund growth initiatives.

 Mohamed Samir Rashed CMA , IFRS

Mohamed Samir

19
One limitation of cash flow
analysis is that it does not take
into account non-cash items, such
as depreciation and amortization,
which can impact a company's
profitability but do not affect its
cash flow.

Mohamed Samir Rashed CMA , IFRS

20
Mohamed Samir

Another limitation is that cash flow

analysis only provides a snapshot of a
company's financial health at a particular
point in time, and does not necessarily
provide insights into its long-term
growth potential or competitive
positioning. As such, cash flow analysis
should be used in conjunction with other
financial analyses and qualitative factors
when making investment decisions.

BY / MOHAMED SAMIR
Mohamed Samir
 Mohamed Samir Rashed Mohamed Samir
CMA , IFRSDIP
For contact
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Mohamed Samir CMA , DIPIFR

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Mohamed Samir Rashed