Most people want to be an investor

But most investors don’t know how to read a cash flow statement

Here’s how to read a cash flow statement:

The Cash Flow Statement shows how cash moves in and out of a company.

The cash flow statement is presented in the quarterly and annual company filings

The things I ask myself:

-Is operating cash flow positive or negative? (Positive)
-Is capital expenditures less than OCF? (Yes)
-Is the company buying back stock or issuing new shares? (Buying back)

These are 3 simple questions to ask yourself before reading one

Cash flow is divided into 3 sections:

-Cash from operating activities
-Cash from investing activities
-Cash from financing activities

These are the 3 main components of every cash flow statement.

1. Operating Activities

Cash flows from operating activities explains the cash flows within the business for its normal operations over a particular period.

This will show whether a company is capable of generating positive cash flow to maintain and grow its operations.