From the course: Cash Flow Cycles and Analysis

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Conducting a comprehensive cash flow analysis

Conducting a comprehensive cash flow analysis

From the course: Cash Flow Cycles and Analysis

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Conducting a comprehensive cash flow analysis

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- [Narrator] Now that we've completed our cash flow statement, let's perform some additional analysis down below. There are a few items we can compare here. We often hear companies referring to their net income, their EBITDA or EBIT, cash flow from operating activities and free flow. These are all important metrics, so let's compare all of them together. Let's compare net income, EBITDA, a very common metric, earnings before interest, taxes, depreciation and amortization, cash from operating activities, cash flow from operations, and then free cash flow as well. So let's link each of these up. Net income, we're simply going to grab from the bottom of the income statement. EBITDA, if we go back up to the income statement, is going to be equal to EBIT, or operating profit, plus depreciation and amortization added back. Then we have cash flow from operating activities. That's straight on our cash flow statement right here. And then we have free cash flow, which is most commonly defined…

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