Cash flow statement ratios, Financial Management

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Cash Flow Statement Ratios:

This ratio, which is defined as a percentage, compares a company's operating cash flow to its total sales or revenues, which provide investors an idea of the company's ability to convert sales into cash.

It could be worrisome to see a company's sales grow without a parallel growth in operating cash flow.  Negative and Positive changes in a company's terms of sale or the collection experience of its accounts receivable will defines in this indicator.

Formula:

1428_Cash Flow Statement Ratios.gif


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