Thank you for this, sir! I'm two years into being an accounting major and I've never understood the cash flow statement more than I do now! I know its a pain, but would you be willing to do a video on the direct method? It may never come up in my career, but i assume I'll have to use it at least a few times in school and I don't get it.
Thanks for watching and sharing your feedback! I'd love to make a video on the direct method but to be honest, I am pretty clueless on how to create one with historical data. The reason being you'd have to have a lot of extra info outside of what's provided in your financial statements (like how much cash you collected from customers, how much you paid to employees vs vendors etc.). For projecting this it's pretty simple though. I'll give some thought into the future on how I can share some more on that - feel free to keep the ideas coming!
@@yourcfoguy Off the top of my head, I think a deeper dive on COGS, Inventory, operating expenses, or depreciation could be interesting. I'd be most interested in a series on financial statement analysis. I know how to create them, but I don't have as good of an idea on what to do with them.
Thanks for watching! FCF = Operating cash Flows - Capex. It represents the amount of cash a company generates after the cash from operating the business and maintaining it's fixed assets. FCF Margin = FCF / Revenue Hope this helps
@@yourcfoguy thx . If the capex is funded by a loan. Am I right to assume the number to be subtracted is the interest plus the principal on that year to be subtracted
you would subtract out the capex value rather than how that was funded (in this case a loan). Proceeds or repayments related to loans are financing activities and hence wouldn't be included here. Interest on the other and is already part of cash from operating activities, since it shows up on your P&L, and cash from operating activities includes your net income
Get my free Cash Flows worksheet here: www.yourcfoguy.com/templates/the-statement-of-cash-flows-worksheet
Thank you for this, sir! I'm two years into being an accounting major and I've never understood the cash flow statement more than I do now!
I know its a pain, but would you be willing to do a video on the direct method? It may never come up in my career, but i assume I'll have to use it at least a few times in school and I don't get it.
Thanks for watching and sharing your feedback! I'd love to make a video on the direct method but to be honest, I am pretty clueless on how to create one with historical data. The reason being you'd have to have a lot of extra info outside of what's provided in your financial statements (like how much cash you collected from customers, how much you paid to employees vs vendors etc.). For projecting this it's pretty simple though.
I'll give some thought into the future on how I can share some more on that - feel free to keep the ideas coming!
@@yourcfoguy Off the top of my head, I think a deeper dive on COGS, Inventory, operating expenses, or depreciation could be interesting.
I'd be most interested in a series on financial statement analysis. I know how to create them, but I don't have as good of an idea on what to do with them.
Can you also clarify what is free cash flow , are they related to the total cash glpw , also what is the free cash flow margin ?
Thanks for watching! FCF = Operating cash Flows - Capex. It represents the amount of cash a company generates after the cash from operating the business and maintaining it's fixed assets.
FCF Margin = FCF / Revenue
Hope this helps
@@yourcfoguy thx . If the capex is funded by a loan. Am I right to assume the number to be subtracted is the interest plus the principal on that year to be subtracted
you would subtract out the capex value rather than how that was funded (in this case a loan). Proceeds or repayments related to loans are financing activities and hence wouldn't be included here. Interest on the other and is already part of cash from operating activities, since it shows up on your P&L, and cash from operating activities includes your net income
Very Concise
Thanks for watching!
❤ Keep it up sir... 🔥🔥
Thanks for watching, will do!