HOW TO CONVERT OPERATING CASH FLOW FOR PROPER ADJUSTMENT
COMPLETE REPORT SENT TO CONSULTING AND ADVISORY CLIENTS
This quarter, we have attached a significant report detailing the analysis of Cash from Operating Activities.
Our methodology begins with a fundamental shift from the commonly reported Indirect Method presented to shareholders, to the analytically and intuitively superior Direct Method.
Although the Direct Method provides more transparent insight into a company’s true cash velocity, the FASB has thus far been unsuccessful in mandating its use by reporting entities. As outlined in the report, we further refine this baseline by applying our proprietary normalization adjustments to the Direct Method, ensuring the resulting figures reflect the true economic health and sustainable liquidity of the firm.
