Cash Flow From Operations Archives | Value Investing - Business and Economic Principles

Cash Flow From Operations

The goal of every company’s normal operations is to generate a profit and generate positive cash flow from one accounting period to the next. Cash flow from operations answers the question of whether regular business operations generates cash from one accounting period to the next. Understanding cash flow from operations is essential with maintaining solvency.

Railroad Stocks – Analysis 02/15/2020

Railways Pool / By David J Hoare MSA / 02/17/2020 02/05/2022

Every one of the six railroad stocks are at or above their all-time highs. As of today, February 15, 2020, the various stock prices are as follows: Union Pacific 184.65; Norfolk Southern $206.85; Canadian National $93.93;
Kansas City Southern $173.64; Canadian Pacific $270.86; CSX $79.59.

In addition, the price to book ratios are also higher than last quarter. The key question: is there any value in any of the stocks? To do this, a table of various preferred ratios must be prepared and explained in a write-up.

Two critical points of information are evaluated, both the gross profit margin and operational cash flow per share are explained in this article.

Price to Cash Flow

Business Ratios / By David J Hoare MSA / 03/24/2019 03/03/2022

The price to cash flow ratio is a valuation tool used to assist buyers and sellers of stock in determining timing of purchases or the disposition of shares. Unlike the other valuation ratios, this particular ratio utilizes the cash flows statement in determining the outcome. The formula is simple:

Price to Cash Flow = $Market Price of a Share of Stock/Cash Flow in Dollars Per Share of Stock

Liquidity Ratios

Business Ratios / By David J Hoare MSA / 11/17/2018 03/03/2022

Liquidity ratios are a group of ratios used to measure the ability of a business operation to meets its current obligations. Liquidity ratios are similar to the initial medical tests a patient receives at a doctor’s visit. Doctors take blood pressure, temperature, and pulse rate. The doctor wants assurance that the primary indicators of health are good. Liquidity ratios are exactly the same. The user wants to know that the basic measurements of a business indicate good health today.

Cash Flow From Operations – Understanding Cash Flow (Part II)

Phase II - Financial Analysis / By David J Hoare MSA / 11/02/2017 02/25/2022

To understand the cash situation, the cash flows statement is an additional report included in financial statements to basically convert the accrual basis balance sheet and income statement into a cash basis report. This way, management gets the best attributes of both accrual and cash basis accounting.