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MARKET RATIO: Price-to-cash flows-ratio One of the business ratio analysis which we often come across is the Price-to-cash flow ratio. Append below in summary what is this market ratio is all about:- Ratio Price-to-cash flow ratio To measure whether a company’s share price is high or low in the context of its cash flow. Both asset based finance and cash flow finance are important sources of funding for a business for its short term(working capital) and long term(capital assets) sustainability. Asset-based finance is a source of funding that is secured by a company’s assets. This article looks at what is asset based finance and see the difference between the more traditional source of finance namely cash flow loan or finance.  Asset based finance:Accounts Receivables,Inventory,etc Some features of asset-based finance include:
It’s very important that readers understand what are cash flow statements and the components in it.
Earnings can be distorted by using creative accounting but cash flow are difficult to do so. A company can be profitable but it can collapse due to illiquidity/insolvency.
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FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four, Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.
Also author to another very popular free educational accounting cum finance blog: http://basiccollegeaccounting.com under the branding of College Accounting Coach. |
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