The CASH FLOW STATEMENT: all the basics in 9 minutes

[@atoznum1]

AMAZING breakdown!!! The true sign of a good teacher is having the ability to teach any subject, no matter how complicated, in simple terms. Thank you!!

[@BrianFeroldiYT]

:)

[@fendermon]

Terrific, amazing how many "investors" can't be bothered learning basics like this.

[@BrianFeroldiYT]

Too many....

[@fallout187]

Brian, Just discovered your channel and love how you explain everything. Just bought your accounting explained visually and have been very satisfied. I did have a requests if possible. I understand that income statements, cash flow statements, and balance sheets are all meant for evaluating a business but I’d like to use these financial statements for my personal finance. Is it possible to modify the categories within each financial statement to make this fit? Outside of W2 income I have stocks and covered calls/cash secured puts options that I trade weekly. I’ve been reinvesting all of the profits when the options expire. I think the financial statements will help me monitor my finances better than a basic personal budget tracker which I don’t think captures everything like this.

[@BrianFeroldiYT]

Sure, modify away! Or are you asking if there is a spreadsheet you can download with them? If so email [e-mail]

[@nikkione9901]

Thanks , this video was more helpful than my entire accounting class.

[@BrianFeroldiYT]

You're very welcome!

[@aj9832]

Great video. I appreciate the insight. Can you make a video on the various financial ratios such as P/E, PEG, price to sales, free cash flow, discounted free cash flow etc.

[@BrianFeroldiYT]

Great suggestion!

[@mikek6478]

Insightful video! You mentioned that stock compensation issued to its employees needs to be reasonable (not a large number) compared to net income. What is reasonable (e.g., less than 30%, 20%, 10% of net income)? Thanks!

[@BrianFeroldiYT]

I think that 10% of net income is a good target, but it depends on the stage of the company

[@mikek6478]

@@BrianFeroldiYT Thanks! A company with 10% of net income is very hard to find and especially for small growth companies, as they either don't have a net income or they do but incentize employees with stocks which exceeds the 10%. Thanks again!

[@sinnehd]

i love this dude, Giving an very good insight to a Good company.

[@BrianFeroldiYT]

I appreciate that!

[@MMOI96]

Didn't understood from 3:30 to 3:52 . Kindly help😢

[@sllgrecco]

If you take the cash the company generates in his operations, add the cash it used in his investing and financial activities (in this case negative numbers), you get what has changed in cash for the company in this period (5000 - 2000 - 2000= 1000). The company had 1000 in cash at the beginning, now has 2000 (initial 1000 plus 1000 it generated).

[@shreyasjuloori3147]

3:41 wouldnt all of them added become $9000 for changes in cash

[@illfunk1967]

Great tutorial .. thanks you

[@BrianFeroldiYT]

Glad it was helpful!

[@partnermammoth2562]

Can someone explain the adding the non-cash charges I still dont understand why we are adding it back. Also by free cash being used to reward shareholders does he just mean dividens?

[@BrianFeroldiYT]

There are "non-cash" charges that are included on the income statement like depreciation & amortization. However, since they are "non-cash", the money didn't leave the bank account. Since cash didn't change hands, we have to account for that on the cash flow statmement. Let's say a company has $1,000 in depreciation. That $1,000 charge is INCLUDED on the company's income statement, which reduces Net Income by $1,000. However, since that $1,000 didn't leave the company's bank account during the period, it needs to be added back on the cash flow statements. Hope that helps!

[@partnermammoth2562]

​@@BrianFeroldiYT Thank you for replying that was very helpful. I think I basically get it now. But could you explain what exactly amortization is?

[@shafis5096]

@@partnermammoth2562 Depreciation: When you buy a car and use it. At the end of each month you take down the amount that is standard like $300 or $500 depending on the number of years you want to depreciate it in. So basically it is for a physical asset. Amortization: Similarly for some assets which are not physical in nature such as a loan, mortgage etc. you amortize them monthly over the number of years you have taken for. Hope I am clear enough.

[@gabech2789]

Big fan of your approach 👍 thanks for the breakdown 😃

[@BrianFeroldiYT]

Glad it was helpful!

[@shs-]

i love you brian feroldi

[@BrianFeroldiYT]

lol. 😘

[@qp9vp]

The US should learn from countries such as Sweden. Reading a companies annual report and financials for a Swedish company vs. an American is like entering a completely different world. Swedish versions are informative, logical, and easy to understand for everyone. They give background and explain strategy and events.. An american 10k is like reading a nightmare created by an accountant.

[@BrianFeroldiYT]

There's nuance for sure! Warren Buffett thinks that American accounting is superior to all other forms. Hard to disagree with him.

[@vignesh1065]

​@@BrianFeroldiYTCould you do a video on why you think the American way of reporting & the US GAAP are better than reporting in other countries & IFRS? Would make for an interesting video.

[@user-fs8tl7ni1w]

Does Sweden do this purported financial statement simplification approach at the expense of dumbing down its financial statements? We don’t. That’s why accountants prepare them for professionals in the United States.

[@musak.4068]

@@vignesh1065we’re the richest country on earth. That should be enough of an answer for you

[@bharatichaudhari]

Superb analysis

[@BrianFeroldiYT]

Glad it was helpful!

[@juanacevedo5738]

Spectacular

[@BrianFeroldiYT]

Glad it was useful!

[@savvytrader]

Fantastic keep sharing

[@BrianFeroldiYT]

Will do!

[@samuelmandel4537]

Thank you!

[@BrianFeroldiYT]

You're welcome!

[@mohdjibly6184]

Amazing...thanks Brian

[@BrianFeroldiYT]

Glad you enjoyed it

[@milk9720]

why don't you take out the cash paid for acquisitions to get free cash flow? Wouldn't this be cash taken away from shareholders?

[@BrianFeroldiYT]

Cash paid for acquisitions is something that they DO with the free cash flow. They could also buy backstock and pay dividends. But none of those activities impact how much free casual they generate.

[@milk9720]

@@BrianFeroldiYT gotcha! Thanks!

[@Ko-gl4nhfv]

Excellent

[@BrianFeroldiYT]

Thank you so much 😀

[@boglionifranco3698]

very good

[@BrianFeroldiYT]

Thank you! Cheers!

[@Mahad20110]

bro why u don't have an online course?!!

[@BrianFeroldiYT]

Like this? longtermmindset.co/the-buffett-method/

[@Rohenw123]

Do a Udemy course!

[@BrianFeroldiYT]

We do have an accounting course!