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The cash flow statement shows the sources of a company's cash flow and how it was used over a specific time period. It is an important indicator of a company's financial health, because a company can report a profit on its income statement , but at the same time have insufficient cash to operate.
It is a measure of the number of times the cash flow over the life of the project can repay the outstanding debt balance. The Loan life cover ratio (LLCR), similarly is the ratio of the net present value of the cash flow over the scheduled life of the loan to the outstanding debt balance in the period. Other ratios of this sort include:
Financial statement analysis (or just financial analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions to earn income in future. These statements include the income statement, balance sheet, statement of cash flows, notes to accounts and a statement of changes in equity (if ...
Changes in financial position include cash outflows, such as capital expenditures, and cash inflows, such as revenue. It may also include certain non-cash changes, such as depreciation. The use of this statement is to provide relevant and focused on a period, so that users of financial statements with sufficient information to:
Interest is a financing flow. [4] It takes into consideration how the operations are financed or taxed.Since it adjusts for liabilities, receivables, and depreciation, operating cash flow is a more accurate measure of how much cash a company has generated (or used) than traditional measures of profitability such as net income or EBIT.
collateralized debt obligation cash-flow diagram. interest rate swap cash-flow diagram. A cash-flow diagram is a financial tool used to represent the cashflows associated with a security, "project", or business. As per the graphics, cash flow diagrams are widely used in structuring and analyzing securities, particularly swaps. They may also be ...
Cash flow forecasting is the process of obtaining an estimate of a company's future cash levels, and its financial position more generally. [1] A cash flow forecast is a key financial management tool, both for large corporates, and for smaller entrepreneurial businesses. The forecast is typically based on anticipated payments and receivables.
Cash flow matching is a process of hedging in which a company or other entity matches its cash outflows (i.e., financial obligations) with its cash inflows over a given time horizon. [1] It is a subset of immunization strategies in finance. [2] Cash flow matching is of particular importance to defined benefit pension plans. [3]