Analyzing Statements of Cash Flows II
2025 Curriculum
CFA® Program Level I
Financial Reporting and Analysis
Refresher reading access
Introduction
An analysis of a company’s statement of cash flows provides crucial information for evaluating a company’s financial position and for forecasting its future cash flows, which is foundational to the valuation of the company’s debt and equity securities. This module discusses tools and techniques for analyzing the statement of cash flows, including the analysis of sources and uses of cash and cash flow, common-size analysis, and the calculation of free cash flow measures and cash flow ratios.
Learning Outcomes
The candidate should be able to:
- analyze and interpret both reported and common-size cash flow statements
- calculate and interpret free cash flow to the firm, free cash flow to equity, and performance and coverage cash flow ratios
0.5 PL Credit
If you are a CFA Institute member don’t forget to record Professional Learning (PL) credit from reading this article.