Ratios in Cash Flow Statements

This section describes several ratios that can be computed from the statement of cash flows. Because the statement of cash flows is a relatively recent addition to GAAP, the development of cash flow ratios is at an early stage, and there is no general consensus about which ratios are the most informative. Also note that some of these ratios require information disclosed only by the direct approach for preparing the operating activities section.We will illustrate ways to estimate this information from statements of cash flows using the indirect approach.

Show Buttons
Hide Buttons