@brianferoldi: 10 Cash KPIs 👉 FOLLOW @brianferoldi for more content like this. Grab a free copy of my accounting infographic ebook (link in bio) Use these 10 KPIs to analyze a company's cash: Cash Flow From Operations (CFFO) - Measures the net cash generated or used in the business's regular operations. - Formula: Net Income + Non-Cash Expenses +/- Changes in Working Capital Free Cash Flow (FCF) - Represents the cash available to the company after all expenses, investments, and other cash flows have been accounted for. - Formula: Cash Flow from Operations - Capital Expenditures Quick Ratio (Acid-Test Ratio) - An immediate measure of liquidity. - Formula: (Cash + Receivables) / Current Liabilities Current Ratio - Indicates the company's ability to pay its short-term obligations. - Formula: Current Assets / Current Liabilities Days Inventory Outstanding (DIO) - Measures the average number of days to sell inventory. - Formula: (Average Inventory / Cost of Goods Sold) x Number of Days in the Period Days Sales Outstanding (DSO) - Measures the average number of days to collect payments from customers. - Formula: (Accounts Receivable / Total Credit Sales) x Number of Days in Period Days Payable Outstanding (DPO) - Measures the average number of days to pay suppliers. - Formula: (Accounts Payable / Total Credit Purchases) x Number of Days in Period Cash Conversion Cycle (CCC) - Calculates the time in days for a company to convert inventory into cash. - Formula: DIO + DSO - DPO Cash Burn Rate - Indicates how quickly a company is using up its cash reserves. - Formula: (Beginning Cash Balance - Ending Cash Balance) / Number of Months Cash Runway - Measures the number of months until an unprofitable company will run out of cash. - Formula: Cash Balance / Cash Burn Rate Which metrics do you watch the closest? #accounting #investing #investingforbeginners #finance #finance101
