Cash Flow: The Most Important Number After Profit

📈 Register for the Training Program on Fundamental Analysis with Peeyush Chitlangia: https://forms.gle/64t6V7jLvvCg4Hix9 In this video, I explain why the Cash Flow Statement is important when analysing a company and why looking at profits alone may not always give us the complete picture. We start with the difference between profit and cash flow and understand how a company can report profits while still having its cash stuck in receivables or inventory. We then look at the indirect method of preparing a Cash Flow Statement and understand how depreciation, receivables, payables and working capital affect the cash generated by a business. The video then covers the three components of the Cash Flow Statement: Cash Flow from Operating Activities, Cash Flow from Investing Activities and Cash Flow from Financing Activities. We look at what each of these tells us and how they can help us understand how a company is funding its growth, whether through its own cash generation, debt or equity. We then look at examples including NTPC Green Energy, Genus Power and Jaiprakash Associates to understand how operating cash flow, capex, borrowing, receivables and inventory can affect a company’s financial position. The examples also help us understand why negative cash flow is not always a bad thing and why we need to look at where the cash is being used. Finally, I explain how investors can look at the relationship between profits and operating cash flow when analysing a company. Over a longer period, profits should ideally translate into operating cash flow, and if that does not happen, it is important to understand where the cash is getting stuck. Follow me on socials: LinkedIn -   / peeyushchitlangia   X - https://x.com/peeyushc Timestamps: 00:00 Preview 00:37 Introduction to the topic 01:20 What is cash flow 02:30 How a cash flow statement is made 12:08 Three Components of Cash Flow 16:43 Understanding Debt-Funded Expansion 19:23 NTPC Green Energy Case Study 23:27 Genus Power & Negative Cash Flow 26:47 Jaiprakash Associates Case Study 28:00 Conclusion