Your content is so amazing. Straight to the point with clear examples. I love the way you speak as well. It's so funny to me because it reminds me a lot of Bill Nye. I'm constantly waiting for you to say "But wait.. There's more!" Keep up the great work!
Thank you so much for the encouragement! I'm humbled to be mentioned in the same context as Bill Nye 😀 I'm glad you're enjoying the videos, I'll keep them coming!
The cash flow statement is my favorite. Probably one of the most important aspects of the operations of a business is their short term cash flow. Lack of liquidity will lead to emergency loans and high interest rates. Great video!
these videos are genius. your humor perfectly cpatures my attention and makes the material easy to understand. please do more accounting basics in this style!!
This is very informative and well-explained in a thorough manner, I'm currently writing an assignment on Finance subject and I think your videos are so helpful.
This is way to clear and concise, so the only question I have is; Why is learning accounting and finance in university made so difficult then? Its almost like they want to make it sound complex and make it intimidating to study.
Some profs focus on research rather than teaching, while other profs are just doing a job and don't find the material engaging. That's why it's so refreshing when you sit in a class on day 1 and find that the prof is really excited to be teaching and eager to help you learn. There are some great profs out there, but unfortunately too few!
Hey Michael! I love your videos, they are helping me survive intermediate accounting. Do you think you could make a video about calculating the Weighted Average Shares Outstanding in order to calculate basic and diluted EPS?
I just worked on an Asian company, the income (EBIT and Net) were all over the place, but the cash flows were consistent. I used Operating CF - Depreciation & A, in order to get a better estimate of the true EBIT - How much did I mess up? :D -- My assumption was that OCF is an approximation to EBITDA, so I subtracted DA in order to "get" EBIT. I need this to get a reliable interest coverage ratio, and I felt that the book value of EBIT was downplayed by the company. -- Would appreciate any comments! Thank you for your content!
I mean, if you think about it, OCF = NI + D&A + Increases in Working Capital (excluding cash). There could be a few more line items, but those two are the heavy hitters. So OCF - D&A is this weird “income without Interest and Taxes” so maybe call it EBDA? Hahaha
A lot of people view EBITDA as a good proxy for operating cash flow, so what you did is quite common. A key difference between EBITDA and OCF is that EBITDA includes the effects of changes in working capital whereas OCF does not. For example, if a company makes a lot of credit sales and accounts receivable increases, this will increase EBITDA but have no effect on OCF. A second difference is that EBITDA isn't affected by the choice of capital structure, whereas OCF is. For example, if a company decides to increase its borrowing and rely more heavily on debt financing, the increased interest expense will have no effect on EBITDA but will reduce OCF.
Thank you very much for the content sir. Just a question please, in case there's positive Net Income and negative Operative Cash Flow, would it be still possible to give EPS to shareholders? Or how is that managed?
If you're asking whether a company can issue a dividend when it has net income but negative operating cash flow, the answer is yes. To do this, they would need to obtain the cash from a source other than their operations (e.g., they could borrow money and then pay it out as a dividend)
As much as I love seeing you, your videos when you're not on camera go at the slower pace with more emphasis on the material and numbers. When you are on camera it's like a performance variable kicks in, you speed up and spend less time explaining some of the material and it's harder to follow. Don't get me wrong - all of your material is bringing me sanity and compared to McGraw Hill, you are a Godsend! But -- less performance, more quality delivery.
Your content is so amazing. Straight to the point with clear examples. I love the way you speak as well. It's so funny to me because it reminds me a lot of Bill Nye. I'm constantly waiting for you to say "But wait.. There's more!" Keep up the great work!
Thank you so much for the encouragement! I'm humbled to be mentioned in the same context as Bill Nye 😀 I'm glad you're enjoying the videos, I'll keep them coming!
The cash flow statement is my favorite. Probably one of the most important aspects of the operations of a business is their short term cash flow. Lack of liquidity will lead to emergency loans and high interest rates. Great video!
Couldn't agree with you more! Excellent insight!
Man, I got my answer in the first two minutes of the video but couldn't quit watching. Awesome video, I loved the pace of information.
these videos are genius. your humor perfectly cpatures my attention and makes the material easy to understand. please do more accounting basics in this style!!
Thank you my friend! More videos are on the way!
This is very informative and well-explained in a thorough manner, I'm currently writing an assignment on Finance subject and I think your videos are so helpful.
Glad it was helpful!
your communication skills are very good
Thank you!
Great teacher. Thankyou alot sir . Lots of love from India 🇮🇳🇮🇳🇮🇳🇮🇳🇮🇳🇮🇳🇮🇳🇮🇳. I'm also a CA (CHARTERED ACCOUNTANT) FINAL Student.
Thank you for your support! Congratulations on becoming a CA!
I really want to appreciate your content....Sir you make learning accounting so much fun.
Thank you for the kind words! I'm so happy you're enjoying the videos 😀
This is way to clear and concise, so the only question I have is; Why is learning accounting and finance in university made so difficult then? Its almost like they want to make it sound complex and make it intimidating to study.
Some profs focus on research rather than teaching, while other profs are just doing a job and don't find the material engaging. That's why it's so refreshing when you sit in a class on day 1 and find that the prof is really excited to be teaching and eager to help you learn. There are some great profs out there, but unfortunately too few!
I love, Wilson, on your bookshelf! Great video as always!
I'm glad you enjoyed the video, plus the cameo from Wilson!
Great, straight to the point
😀
Awesome! Thank you Michael
No problem my friend! I hope life is treating you phenomenally well!
Hey Michael! I love your videos, they are helping me survive intermediate accounting. Do you think you could make a video about calculating the Weighted Average Shares Outstanding in order to calculate basic and diluted EPS?
I will add that topic to the to-do list! Good luck with the class, hang in there!
Wilson on the bookshelf 😂
Thanks for this video, it was really helpful! Subscribed!
Your content is amazing!
Thank you so much, that means a lot!
does member ship includes accounting course? or videos in order to help me get better in accounting?
I just worked on an Asian company, the income (EBIT and Net) were all over the place, but the cash flows were consistent. I used Operating CF - Depreciation & A, in order to get a better estimate of the true EBIT - How much did I mess up? :D
--
My assumption was that OCF is an approximation to EBITDA, so I subtracted DA in order to "get" EBIT.
I need this to get a reliable interest coverage ratio, and I felt that the book value of EBIT was downplayed by the company.
--
Would appreciate any comments!
Thank you for your content!
I mean, if you think about it, OCF = NI + D&A + Increases in Working Capital (excluding cash). There could be a few more line items, but those two are the heavy hitters.
So OCF - D&A is this weird “income without Interest and Taxes” so maybe call it EBDA? Hahaha
A lot of people view EBITDA as a good proxy for operating cash flow, so what you did is quite common. A key difference between EBITDA and OCF is that EBITDA includes the effects of changes in working capital whereas OCF does not. For example, if a company makes a lot of credit sales and accounts receivable increases, this will increase EBITDA but have no effect on OCF.
A second difference is that EBITDA isn't affected by the choice of capital structure, whereas OCF is. For example, if a company decides to increase its borrowing and rely more heavily on debt financing, the increased interest expense will have no effect on EBITDA but will reduce OCF.
Sir, Nice video. How often should a company prepare cashflow statement
Publicly-traded companies in the U.S. need to issue a statement of cash flows every quarter
@@Edspira Thanks
This is the reason why i choose ROCE base on operating cash flow than ROCE in normal way
😀
solved all my problems at once
Thank you very much for the content sir. Just a question please, in case there's positive Net Income and negative Operative Cash Flow, would it be still possible to give EPS to shareholders? Or how is that managed?
If you're asking whether a company can issue a dividend when it has net income but negative operating cash flow, the answer is yes. To do this, they would need to obtain the cash from a source other than their operations (e.g., they could borrow money and then pay it out as a dividend)
@@Edspira Thank you sir!
Thank you
No problem my friend!
🔥
😀
but if the company receives revenue at the same time of cash then the net income will be equal to cash !! isn't true
As much as I love seeing you, your videos when you're not on camera go at the slower pace with more emphasis on the material and numbers. When you are on camera it's like a performance variable kicks in, you speed up and spend less time explaining some of the material and it's harder to follow. Don't get me wrong - all of your material is bringing me sanity and compared to McGraw Hill, you are a Godsend! But -- less performance, more quality delivery.