Cash Flow

Cash flow refers to the “statement of cash flows”, an accounting statement that shows how cash is generated or spent by a company in a certain period. It is calculated by adding non-cash charges such as depreciation into net income after taxes. There are many different ways to analyze cash flow.  Some investors rely on cash flow more than earnings because it is harder to manipulate cash flow, and thus it is a more objective reflection of a company’s financial strength.

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