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Learn Company Cashflow Statement Analysis 2023 | P6 Stock Fundamental Analysis

Original: Company Cashflow Statement 📃 Analysis నేర్చుకోండి 2023| P6 Stock Fundamental Analysis నేర్చుకొండిలా!

149.2K views · Feb 20, 2021 · 16:21 min · Watch on YouTube ↗
Takeaway

Always verify that a company's reported profits convert into real operating cash flow, ideally 70-80%, before investing.

Summary

  • Profit on P&L is not the same as cash received - promoters can inflate profits via credit sales while paying real tax on phantom income.
  • Warren Buffett prioritises the cash flow statement over P&L, with special focus on Free Cash Flow as the truest measure of business health.
  • Three components explained: Cash Flow from Operating, Investing, and Financing Activities - red flag if Investing/Financing exceed Operating.
  • Rule of thumb: at least 70-80% of reported profits should convert into operating cash; if not, read the annual report to find why.
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Original description
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This is the sixth part of Fundamental analysis Series by Money purse. In this video we explained how to do fundamental analysis of a company covering Cashflow statements, the parameters and websites used for fundamental analysis of a stock are explained. Cashflow plays a key role when it comes to Fundamental analysis of a Stock.

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