Cash flow measures net cash inflows and outflows in a business. Three main categories: operating, investing, and financing activities. Positive cash flow indicates surplus, negative indicates cash shortage
DIO shows how long it takes to convert inventory into cash. Formula: Inventory / Cost of Sales * 365. Also known as Days Sales of Inventory (DSI)
EBITDA was created by John Malone in 1970s to assess company health without economies of scale. EBITDA excludes interest, taxes, depreciation, and amortization from net income. EBITDA is not recognized under U.S. GAAP and can be manipulated. EBITDA is typically higher than operating income due to added back depreciation
Margin calculator helps determine revenue from cost and desired profit margin percentage. Profit margin determines company health, low margins indicate potential trouble. Margin is calculated as percentage of revenue, unlike markup based on COGS
P&L statement shows revenues, expenses, and net profit for a specific period. Public companies must file P&Ls with SEC for legal reporting. Statements help evaluate company performance and profitability
Working capital is the difference between current assets and current liabilities. Calculated by subtracting current liabilities from current assets. Positive working capital indicates sufficient resources for operations. Negative working capital suggests potential liquidity issues