What are the main indicators of cash flow statement analysis?

When analyzing the solvency of an enterprise, the first thing to look at is whether the cash income obtained by the enterprise in the current period has enough cash to repay the due debts after meeting the cash expenditure required for production and operation. On the basis of having a balance sheet and a profit and loss statement, the following two ratios can be used for analysis:

1. Short-term solvency = net cash flow from operating activities/current liabilities.

The ratio of net cash flow from operating activities to current liabilities is an index that creditors are very concerned about. It reflects the ability of enterprises to repay short-term debts, and it is a dynamic index to measure the ability of enterprises to repay short-term debts. The greater the value, the better the short-term solvency of the enterprise, on the contrary, the worse the short-term solvency of the enterprise.

2. Long-term solvency = net cash flow from operating activities/total liabilities.

The ratio of net cash flow from operating activities to total debts of an enterprise reflects the ability of an enterprise to repay all debts with cash obtained from operating activities. The higher the ratio, the stronger the ability to repay all debts.

The greater the value of the above two ratios, the stronger the ability of enterprises to repay debts. However, the greater the proportion, the better. This is because the profitability of cash is poor. If the amount of "cash increase" in the cash flow statement is too large, it may be that the current production capacity of the enterprise can not fully absorb the existing assets, so that the assets stay too much in the cash with low profitability, thus reducing the profitability of the enterprise.

Second, the ability to pay analysis

1. Ability to pay dividends = net cash flow from operating activities/number of common shares in circulation.

The ratio of net cash flow from operating activities to the number of ordinary shares issued reflects the ability of enterprises to pay dividends. For example, cash flow per share = (net cash flow from operating activities-preferred stock dividends)/weighted average of outstanding common shares, reflecting the highest cash dividend that an enterprise can pay to shareholders while maintaining its initial cash stock.

2. The ability to pay cash dividends = net cash flow from operating activities/cash dividends.

The ratio of net cash flow generated from operating activities to cash dividends reflects the ability of enterprises to pay cash dividends in that year. The large proportion between them proves that the enterprise has strong cash payment ability, otherwise it will form payment risk.

3. Comprehensive payment capacity = net cash flow generated from operating activities/share capital.

This indicator reflects the enterprise's ability to pay. The higher the ratio, the stronger the comprehensive payment ability of the enterprise.

Third, the profitability analysis

Through cash flow, we can compare the net cash flow generated by operating activities with net profit and capital expenditure, and reveal the ability of enterprises to maintain the current operating level and create future profits.

1. Sales cash ratio = net operating cash income/sales in the same period.

It can accurately reflect the cash available for every dollar of sales.

2. Net operating cash flow per share = net operating cash inflow/number of common shares.

It reflects the maximum ability of enterprises to distribute cash dividends.

3. Cash recovery rate of all assets = net operating cash flow/all assets.

It shows the extent to which the assets of an enterprise can generate cash, or the extent to which the assets of an enterprise can generate cash.

4. Ability to create cash = net cash flow/net assets generated by operating activities.

This ratio reflects the ability of investors to invest capital to create cash. The higher the ratio, the stronger the ability to create cash.

5. Cash flow per share Total assets Cash yield = net operating flow before interest and income tax/average total assets.

Fourth, the future development potential analysis

1: In order to achieve the continuous expansion of its own scale, enterprises must increase a large number of long-term assets, which are reflected in the cash flow statement, that is, the cash outflow from investment activities should be greatly improved. Whether it is the cash outflow of domestic investment or the cash outflow of foreign investment, their substantial increase often means the arrival of a new investment opportunity and development opportunity. In addition, we can also link the cash flow generated by investment activities and fund-raising activities to analyze and inspect the future development of enterprises. When the net cash outflow from investment activities and the net cash inflow from financing activities are quite large in this period, it shows that enterprises can raise a large amount of funds from outside to expand the scale of production and operation while maintaining the stability of internal operations.