Workflow Templates: Cash Flow Analysis Checklist

Review the company's cash flow statement and identify the key components: operating activities, investing activities, and financing activities.

Examine the net income from the income statement and reconcile it to cash from operating activities.

Assess changes in working capital accounts to understand their impact on cash from operations.

Evaluate the company's earnings quality by comparing net income to cash flow from operations.

Analyze the trends in accounts receivable, inventory, and accounts payable to assess their impact on cash flow.

Investigate non-cash expenses such as depreciation and amortization to understand their relation to maintenance and capital expenditures.

Review capital expenditures and compare them to the industry standard and historical company performance.

Analyze any proceeds from the sale of assets and consider their sustainability and impact on future cash flow.

Assess the cash flow implications of any acquisitions or disposals of investment securities or subsidiaries.

Examine the cash flow effects of changes in debt and equity, including loan issuances, repayments, and equity financing.

Analyze dividend payments and share buybacks to evaluate their impact on shareholder value and future cash flow.

Consider the implications of any refinancing activities on the company's cost of capital and cash flow stability.

Assess the reasonableness of the company's cash flow forecasts by comparing them to historical patterns and industry trends.

Consider the impact of external economic factors on the company's future cash flows.

Review the assumptions used in the cash flow projections for their validity and sensitivity to changes in the business environment.

Calculate and analyze liquidity ratios such as the current ratio and quick ratio to assess the company's ability to meet short-term obligations.

Compute and evaluate cash flow ratios like the operating cash flow ratio to understand the efficiency of cash generation.

Analyze leverage ratios such as the debt-to-equity ratio to evaluate the company's financial risk and capital structure.

Cash Flow Analysis Checklist