Cash flow is the key to a companys ability to pay dividends cover debts and so forth thus some analysts focus on the ratio of price to cash flow rather than the traditional price earnings p e measure cash flow is especially useful in assessing firms in capital intensive industries where huge depreciation charges can hide healthy profits. Revenue profit and cash flow conundrum it can be easy to focus on a single core metric to evaluate the health of your business but that could be to your detriment any one of these three cornerstones can cause you a significant headache if not kill business if they arent all in line many businesses have been caught in this cash flow crunch. Revenue is the money a company earns from the sale of their products and services cash flow is the net amount of cash being transferred into and out of a company. This is the ultimate cash flow guide to understand the differences between ebitda cash flow from operations cf free cash flow fcf unlevered free cash flow or free cash flow to firm fcff learn the formula to calculate each and derive them from an income statement balance sheet or statement of cash flows. Operating cash flow sales ratio operating cash flows sales revenue x 100 the figure for operating cash flows can be found in the statement of cash flows it is also sometimes described as cash flows from operating activities in the statement of cash flows the figure for sales revenue can be found in the income statement
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