BA 1100 Lecture Notes - Lecture 3: Cash Flow, Shares Outstanding, Cash Out

• School: Ohio University
• Department: Business Administration
• Course: BA 1100
• Professor: Tim Reynolds

Document Summary

You need to know if the firm can: Cash in cash out = cash generated from core operations. The statement of cash flows shows where the money came from and where it"s going. Cash flow from operations is the most important number on this statement. Different industries have different cash flow profiles. Like the other statements, this one gives you clues to the underlying story. Remind people that profit is the difference between revenue and expense. Shares outstanding = numbers of shares of stock that are available to own. The number of shares a firm has is an arbitrary number. So, if wal-mart has earnings of . 57 per share, and kroger has earnings of . 15 per share, we know nothing! (you need other numbers to make a meaningful comparison) Easier to do if the firms are publicly traded, and in the same industry(ies). The income statement provides a window into a firm"s profitability.