Elements of Cash Flows - AMAZON

Elements of Cash Flows - AMAZON

This week we are studying the Statement of Cash Flows. Operating cash flow represents the cash that flows in and out of the company on a day-to-day basis. For example, cash inflows come from collected revenues and cash outflows occur when the firm pays its normal day-to-day expenses. We, of course, would prefer to see a positive total on the Net Cash provided by Operating Activities, because it implies that cash inflows are greater than cash outflows. In your textbook, the author discusses 4 financial ratios associated with operating cash flows; please study these ratios. Remember that the denominator on the ratio Operating cash flow/Current maturities of long-term debt is being revised to current liabilities; therefore, we will report the ratio as Operating cash flow/Current liabilities (see discussion on page 3 of Module 5 lesson).