Cash Flow for Beginners! | Financial Statement Analysis (3/3)

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In the last episode of the Financial Statement Analysis series, I explain how to read a cash flow statement. We start off with explaining the major components of the cash flow statement, before discussing what we look for as investors and what are some positive and negative signs to look out for.
Finally I wrap up the series by showing how the 3 statements work together to tell a story about the company and its financial position.
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Disclaimer: The information & opinions in these videos are strictly for educational & entertainment purposes ONLY. None of the opinions discussed should be taken as financial advice as I am NOT a financial advisor. Please do your own research & consult a financial advisor.

[@hunterslattery8877]

this was the clearest and most effective series ive seen on financials

[@JLong-yj4yc]

Good set of videos will come back and watch again to let the info keep sinking in

[@normanremedios8190]

excellent presentation, so clear, nothing missed.

[@jaroncorleone]

Incredible series of videos about 10-K statements Super!!

[@kaybennett5324]

Amazing video that I've struggled to find elsewhere. Other videos mention sections to look for but not what that means.. I'd be interested in others

[@TuanTran-sl3lv]

Great video.Thanks Hamish

[@syedgolam1863]

Great explanation with special importance to key areas and numbers to look for, I want you to continue this series with more insights and also consider to make a video series on ratio analysis. Thank you Hamish for your wonderful endeavor on explaining about stocks with simple and jargon free material.

[@HamishHodder]

Thanks for the feedback, I may very well add some more videos to this series!

[@mtmmoas]

This series was EXTREMELY helpful. Beforehand I felt like I had a decent grasp of the income statement and the Balance Sheet but the Cash Flow Statement was something that I couldn't pin down. Thanks for clearing it up man I appreciate it!

[@HamishHodder]

Glad to help Matt!

[@lawrencemaggrey3683]

Brilliant series Hamish¬ Easy to follow

[@yuzaR-Data-Science]

Hey Hamish, I found this series much better then your newest videos of the last year (those are good too ;) )! Because these old videos are more useful! Could you please make full analysis of some currently growing promising (Palantir) and currently considered value (Amazon) companies? I think in the current changing times, where people are reconsider investments, such companies analysis will be of great value for people and you'll manage your goal to hit 200.000 subscribers. Cheers

[@akm5289]

Really enjoyed these series, been looking on KZbin and not come across anything like it so thank you. Could you potentially do a series where you look at 20-30 companies financial statements and breakdown why you would/would not invest into it? That would be an amazing series!

[@danhantack3051]

Outstanding series. Thank you.

[@davidecolonnello2415]

Great series Hamish! Thank you very much

[@karnkeeratiuakulwarawat4073]

Your explanation was really helpful. Love your vdo. Looking for more analysis.

[@vigneshmani2636]

Watching all your videos

[@TuanTran-sl3lv]

Thanks for your video Hamish

[@alexanderm8598]

Thank you for doing this super amazing educational videos

[@leja8639]

Amazing series! very helpul

[@Vacuumcleaner615]

The world need more people like yoy. Thanks for the video, Hamish

[@Jussto55]

Very good explanation

[@APC-pm2on]

enjoyed this series

[@tyenh4191]

Thank you for explaining the most important points in such a clarifying way. Very helpful

[@tinotendamusakasa3302]

Well explained ..All the way from Zimbabwe

[@casparhese5350]

Thanks a lot Hamish. Fantastic content, which I’m truly learning from and enjoying. As requested below, I would also love to have a few follow up including key ratio analysis etc.

[@rushanedavis1284]

this is very informative

[@amelmechalikh4016]

Thank you very much for this video series. It's very helpful and clear !

[@alaaaboudaher4136]

Ur really so clear and straight to the point

[@SaltyNomad]

Hi Hamish, thank you for the clear and easy to follow video. I have a question.. I can't find any videos on analyzing a companies financials that are trading at a loss, and I am particularly interested in this because a lot of great companies, especially IPO's are trading at a loss. Even some of the biggest tech companies such as Autodesk and Dropbox are loss making. Can you do a video on alternative ways to value a company that is net negative? I feel that this an area where there is a lot of potential.

[@lyndamenard8424]

Truly awesome series. Thank you so much clear concise explanations and hence for the insight. Job well done!

[@leawmeihui5344]

Thank you Hamish! You made things clear and easy to understand. Gain a lot in just a short videos and like the real example. You're awesome! Keep it up!

[@johnpalmer4128]

Totally agree with your view on debt. If a company is tinkering around with debt to grow or manage the business then there is elevated risk that they may be struggling or at least unable to grow organically.

[@alidehghani4701]

well done buddy, keep it up

[@thetravelpodcast]

Really helpful for us beginner investors! Thank you very much Cheers

[@katezeng1149]

I love this series!! Very useful and very easy to understand.

[@AmitSingh-re4te]

Wonderful series, and many Thanks for showing statements. I am a visual learner so that helps a lot!

[@florentlabeille694]

Extremely helpful. Thank you very much. Do you recommend any book or class or other video or tips if we would like to go more deeply into these Income Statement/ Balance sheet/ Cash flow statement understandings? I would like to learn more and more about these. Thanks!

[@shineldn5030]

good video thanks

[@TNM467]

Thank you for the video. It's very simple and goes to the the point. Could you please tell us more about the difference between cashflow statement and income statement?

[@iceyle4230]

Thanks Hamish I'm normally a silent watcher but just want to say I love all your videos. This series has been so useful. Keep up the good work :")

[@HamishHodder]

Thanks for the comment, I appreciate it! Glad the content is helpful :)

[@mallikarjunap6951]

Please make some advanced deep dive video for these 3 financial statement analysis, we are interested into investment...

[@robertshuxley]

very helpful series thanks! Enjoy your podcast as well!

[@kirbz4116]

Hey Hamish great content as always. Just wondering, would you ever consider investing in a company that is not yet cash flow positive but is trending towards that direction or would you clearly stay away until then. Again, thank you very much for the high quality videos you put out!

[@aryadutta5281]

Hey Hamish, First of all great content. I am a learner and I highly appreciate the effort you have put into this. On a different note, I would want to get a much deeper perspective on valuing a business. I understand this is for beginners but it would be great if there is another series or different videos added to the same series which go much more in depth. Do you already have such videos up? Regards, Arya

[@pwsim]

Best ever

[@MrTxroro]

This is very useful session. Thanks

[@davidbaron5487]

Thank you for this very informative.

[@harryfanjo5772]

Super useful! Well done. Thank you.

[@Ana_the_librarian]

Excellent series - thank you

[@satnambal7062]

Very nicely explained!!!!!

[@wilsonyu7422]

this is amazing class video! thank you Hamish!

[@tash5897]

Great video Hamish!

[@nikhildhar2004]

Thanks Hamish! Really simplified it.

[@HamishHodder]

Glad to help!

[@nelsonlee9751]

Great video Hamish 👍

[@richardb7726]

Well done, a good series. For me, this was the best. I liked your explanation of free cash flow and also the paying off of long term debt with short term. Often though, it’s about tax. In basic terms, debt is an expense, equity is income, so equity is taxable. It might make sense to buy short term debt, whilst rates are low, and pay off a small amount of longer term debt, rather than pay a larger dividend or share buyback. The firm will feel the benefit, in increased revenues, later down the line, perhaps when the recession hits. That might be why, it’s for a rainy day. Excellent. Slightly disagree with you on Net cash, though. If it is negative, as for example with Netflix, and debt is higher. It could be just a sign of a new company, which is taking on debt to grow. This is to be expected. What could be an issue is if it isn’t a new company, or it is late in a credit cycle, with rising interest rates. Then the type of interest coverage and covenants become important. But great vid though.

[@HamishHodder]

Glad you enjoyed it Richard!

[@richardb7726]

Thanks, just edited my message though, added a bit

[@HamishHodder]

Yep I agree with your bit on net debt, I just personally stay away from those types of companies because the debt factor does make it riskier relative to a company with zero debt

[@richardb7726]

Hamish Hodder I agree, as I think you mentioned in an earlier video, Buffett likes a DE of 0.5. So I always use that as a rule of thumb. I am not as strict as you though on current and quick ratios, I look to >1.0, not 2.

[@peterparker2068]

I think it was good when Netflick was the one and only king in the space but right now there are big players hitting the streaming space and some of the core content that brought viewership is leaving Netflicks. It looks like it is a racking up debt to create unique content which risky and the return might not be delivered in the capital invested.

[@miguelreis1273]

Hey man, nice content keep it up, would like to see a video of you analyzing Tesla, as from my analysis they seem to be operating at a loss. But I don’t understand how the cash flow statements reports otherwise

[@nothingnothing3211]

Why he didn't deduct the financial expenses as well?

[@tommurray4855]

how is netflix negative? I don't get what I'm looking at thats trending negative or compared as negative

[@tommurray4855]

or is apple or also negative?

[@ek7439]

Hi! Just want to ask if a company with a positive operating activities cash flow but negative cash flow on both investing and financing activities, what sort of possibilities would lead to this situation?

[@aidenguzman817]

Not bad kid

[@magicturtle8637]

Great explanations. I want to know that if it’s so easy to evaluate a company, why people loose money in stock market?

[@HamishHodder]

It isn't easy to evaluate a company. It takes many months or even years to understand accurately how a specific business operates and even then there are unforseen events. Plus most people let their emotions dictate their investment decisions

[@magicturtle8637]

Hamish Hodder I agree. The most important thing is that people don’t have is patience.

[@T_VanSumeren]

How come at 7:40 you mention the Cash flows from investing activities being negative means a company is investing. Then at ~ 11:55 you show Netflix which has negative cash from operating activities because of their investment in streaming content, yet their cash flows from investing activities is positive?

[@mariaespudiya4985]

Netflix does not produce much cash?... All along I thought they have high revenue...

[@ianIccyStewart]

I am interested in further investigating of company financial statemenmts and 10-k thx

[@ianIccyStewart]

i