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Reading Financial Reports For Dummies, 4th Edition
book

Reading Financial Reports For Dummies, 4th Edition

by Lita Epstein
April 2022
Beginner content levelBeginner
384 pages
9h 56m
English
For Dummies
Content preview from Reading Financial Reports For Dummies, 4th Edition

Chapter 13

Making Sure the Company Has Cash to Carry On

IN THIS CHAPTER

check Determining a company's solvency

check Gauging financial strength by looking at debt

check Checking cash sufficiency

No business can operate without cash. Unfortunately, the balance sheet (see Chapter 6) and income statement (see Chapter 7) don't tell you how well a company manages its cash flow, which is critical for measuring a company's ability to stay in business. To find this important information, you need to turn to the statement of cash flows, also known as the cash flow statement, which looks at how cash flows into and out of a business through its operations, investments, and financing activities.

In this chapter, I show you some basic calculations that help you determine the cash flow from sales and help you find out whether the cash flow is sufficient to meet the company's cash needs. Throughout the chapter, I use Mattel and Hasbro (two leading toy companies) as examples to show you how to use these tools to evaluate a company's financial health. You can find Hasbro's financial statements, as well as its complete annual report, at https://investors.mattel.com/financial-information and https://hasbro.gcs-web.com/financial-information ...

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Publisher Resources

ISBN: 9781119871361Purchase Link