Business Finance Online

Financial Cash Flow Equations


Operating Cash Flow = EBIT + Depreciation - Taxes
Capital Spending
= Ending Net Fixed Assets
- Beginning Net Fixed Assets
+ Depreciation
Additions to NWC = Ending NWC - Beginning NWC
Net Working Capital = Current Assets - Current Liabilities
Cash Flow from Assets
= Operating Cash Flow
- Capital Spending
- Additions to NWC
Cash Flow to Debtholders
= Interest Expense
- Ending Long-term Debt
+ Beginning Long-term Debt
Cash Flow to Common Stockholders
= Dividends Paid
- (Ending Common Stock - Beginning Common Stock)
- (Ending Capital Surplus - Beginning Capital Surplus)
+ (Ending Treasury Stock - Beginning Treasure Stock)
Cash Flow to Preferred Stockholders
= Preferred Dividends Paid
- (Ending Preferred Stock - Beginning Preferred Stock)
Cash Flow to Investors
= Cash Flow to Debtholders
+ Cash Flow to Common Stockholders
+ Cash Flow to Preferred Stockholders

 

© 2002 - 2010 by Mark A. Lane, Ph.D.