Thread by @RamBhupatiraju

Excellent article on "Cash Flow Metrics and KPIs".

Does a great job of explaining the many important concepts & formulas from the Cash Flow Statement with examples.

netsuite.com/portal/resourc…

My fav metrics/KPIs in the article (Balance sheet metrics are used too).⬇️

✔️Operating cash flow (OCF)
✔️Working capital
✔️Days sales outstanding (DSO)
✔️Days Payable Outstanding (DPO)

✔️Accounts receivable turnover
✔️Accounts payable turnover
✔️Current ratio
✔️Return on equity (ROE)

✔️Free cash flow (FCF)
✔️Cash flow coverage ratio (CFCR)
✔️Operating Cash flow margin
✔️Cash flow from investments
✔️Levered cash flow (LCF)

✔️Cash flow from financing activities (CFF)
✔️Cash conversion cycle (CCC)
✔️Total available liquidity
✔️Liquidity ratio

As a long-term shareholder, once we develop a Business owner mindset, being comfortable reading the Cash Flow Statements and understanding the true economics of the business is critical.

If there's one metric that LT shareholders love to see, it has to be "Durable growth in Free Cash Flow per Share".

/END