Good video. I would add that the Cash Flow Statement is NOT HARD FOR MANAGEMENT TO MANIPULATE. Too many investors jump straight to the CF Statement in the assumption that it can't be messed around with. It is easy to move cash around the place, particularly from CF from Financing Activities to CF from Operations and vice versa. In addition, the CF statement starts getting unreliable for companies that engage in a lot of M&A (e.g. ABInBev, PepsiCo)
@@ThePlainBagel So how can we know if it's being manipulated or not? And is there any other way more reliable to assess how healthy the company is? Thanks in advance =)
That is no entirely true since you have auditors who look into bank statements. Cash flow is harder to make up since cash really are Bank deposits being exchanged and each account is assigned a number. Not to say that is not possible to do it, but it is much harder, it would need banks to be on the side of the firm and play along their game
This video was very well done. It really simplifies the information about the cash flows and makes it much easier to understand. Thank you for taking the time to do this!
I have ALWAYS struggled understanding this with other presentations and through my readings of this and it FINALLY just clicked ! Great video, thanks so much!
suggestion: very useful content, thank you very much. clear and simple. if i may add a recommendation, as a ux researcher, i would recommend doing the following simple change; If you want to discuss 3 elements, cash flow components for example. i would recommend displaying the 3 even when you are discussing one of them. display the 3 each time and highlight the one you will foucs on. this makes for an easier understanding and less cognitive workload. makes is easier for people to remember the 3 (recognition is better than recall). sorry if this is not very clear (sorry, writing this laying down with a significant leg pain) . feel free to reach if you would like more information.
I love your simple and fluid explanation, I'm from Argentina so I have to translate a lot of things to compare them to our financial system (I'm learning fee english business course too lol) and it's awesome!
Best Video Ever ! Now because of It I know the “secret formula” of a good stock/dividend/bond/etc. market !! I cannot thank you enough Plain Bagel. Keep up with your amazing hard work.
Thank you. Info Good info. Simple. Easy to understand. Excellent graphics. CFO When you mentioned suddenly CFO, I was confused. Had to pause video and Google it. Would’ve been nice if a pop up showed, CFO, Cash from Operating Expenses. Sound Music unnecessary. Use best in market audio system. Again. Thank you. Appreciate the info and insights.
I have been watching your videos for a while now. Thanks for spending your time to make these very educative videos. What a great job analyzing the cash flows! I have already subscribed to your channel. Wish you success.
Thank you Richard. It opened up my mind today. So grateful to be able learn what a cash flow is and how it really means to a company how important it is to a company.
Income Statement can be manipulated using accounting principles for maybe tax purposes or others. It should always be read with cash flow statement when evaluating it. Would have loved to see you bifurcating free cash flows for firm and equity as well but overall very informative and great video 👍🏻
I personally like to look at cash flow but going back and removing depreciation. That way your getting the operating earnings and still recognizing the need to spend capx.
a rare, nice and brief explanation of cash flows, thank you. i would like to have such a video on "published accounts and its importance in a business", likewise i would love if plain bagel posts some good videos on "strategic management" comprising these topics specially, "strategic analysis, choice and implementation". thanks again
FCFE if you’re valuing the stock, FCF if you’re valuing the enterprise! As a shareholder you only care about the FCF after it’s paid off debts (so FCFE) because you don’t get the debt money
You are doing an amazing service for all the brain dead newbies who should have started earlier. Thank you for all the hard work you do to create this channel.
At 6:40 you say that the companies have earnings of $10M, but each of the cash flow statements presented later show a net of $1M. Was this a mistake, or is there something else they could make money from?
The two won't equal each other because they are measuring different things. Earnings include things like depreciation that aren't included in ANY of the cash flow numbers. Hope that clears things up!
hi richard, was so easy to understand the basics of a acash flow statement. can u help with detailed reading of a cos cash flow statement with a live example..pls will be highly appreciated . i am struggling right now with a cash flow statemnet
Hi! I just noticed a problem with your example in the end video. The net income (net change in cash) of each company should be $ 1 million, instead of $ 10 million. Right? By the way, your videos are amazing as always (animation is improving too!) :)
Wallmine looks cool, however one thing to be cautious about is the short time frame for the fundamental data, as it goes back 3-4 years max. However, the non-long term data looks pretty neat.
Love the video. There are a couple of things I do not understand. 1) At 4:40 you are talking about +CFF and -CFF but the graphics show +VE and -VE. What does VE stand for? 2) at 5:18 we have OCF - Capex. Operating Cash Flow was not mentioned previously in the video. CFO, Cash Flow from Operations was mentioned. Are they the same? And at one point “Capex, or CFI which is the money a company spends on long-term assets like...”. So is Capex the same as CFI? Or is Capex only a part of what is included in CFI? Thank you!
+ve/-ve are just shorthand for positive and negative! Yes OCF and CFO are the same (I think OCF is used instead more commonly because CFO also stands for Chief Financial Officer). Capex and CFI are similar, but Capex is just a cost; it's how much the company has invested in assets. CFI includes both costs and gains from investing in assets (like Capex) but also gains from selling assets. Hope that clears things up!
With FCF, we’re trying to figure out what a business is able to produce from operations. The figure represents the money available to the stakeholders (“free” as in available and not committed to a liability). The financing cash flows can sort of be viewed as what’s done with the FCF (ie is it paid back to bond holders or shareholders?). Hope that clears it up!
Net change in cash for period was positive for the entire year I just took my operating activities and subtracted it from the other two and was positive
Great.. May you advise how go get online accounting/finance degree from USA? I'm from Iraq (MENA) so international standards is what I seek to have better opportunities in future. Moreover, pls advise if you prefer getting IFRS certificate or an online degree as college?
This is by far the simplest video on cash flow statement on youtube. Kudos to the creator
Well done this is probably one of the the best videos on cash flows
Agreed!
Damn and it's still nonsense to me 😪
@@moomaniac2932 what are you having trouble with?
@@annatorey7236 dont worry about it, I appreciate the offer for help though
Definitely
Good video. I would add that the Cash Flow Statement is NOT HARD FOR MANAGEMENT TO MANIPULATE. Too many investors jump straight to the CF Statement in the assumption that it can't be messed around with. It is easy to move cash around the place, particularly from CF from Financing Activities to CF from Operations and vice versa. In addition, the CF statement starts getting unreliable for companies that engage in a lot of M&A (e.g. ABInBev, PepsiCo)
Very good point! The cash flow statement is certainly not immune to management's influence, thanks for highlighting!
@@ThePlainBagel So how can we know if it's being manipulated or not? And is there any other way more reliable to assess how healthy the company is? Thanks in advance =)
@@tiagolimp yea, so basically, the insiders always have a way to trick and mislead outside investors.
That is no entirely true since you have auditors who look into bank statements. Cash flow is harder to make up since cash really are Bank deposits being exchanged and each account is assigned a number. Not to say that is not possible to do it, but it is much harder, it would need banks to be on the side of the firm and play along their game
@Tim E. well Enron was always burning through cash, never made FCF.
I learned a lot within 10 minutes here than listening to my prof for an hour in zoom. Thanks A Lot Plain Bagel CEO!
One of my favorite RUclips channel. Very knowledgeable , very artuculate. This is one person that I truly undersrand
This video was very well done. It really simplifies the information about the cash flows and makes it much easier to understand. Thank you for taking the time to do this!
I literally just finished the CF chapter in CFA1 just a few weeks ago. Bless your soul, Richard
I have ALWAYS struggled understanding this with other presentations and through my readings of this and it FINALLY just clicked ! Great video, thanks so much!
This channel deserves 1M+ subscribers. Top quality content presented in a very simple way. Keep it up!
suggestion: very useful content, thank you very much. clear and simple. if i may add a recommendation, as a ux researcher, i would recommend doing the following simple change; If you want to discuss 3 elements, cash flow components for example. i would recommend displaying the 3 even when you are discussing one of them. display the 3 each time and highlight the one you will foucs on. this makes for an easier understanding and less cognitive workload. makes is easier for people to remember the 3 (recognition is better than recall). sorry if this is not very clear (sorry, writing this laying down with a significant leg pain) . feel free to reach if you would like more information.
1) Cash from Operating Activities
2) Cash from Investing Activities
3) Cash from Financing Activities
F.I.O.
😐😐😐OK..... U summarize
Thanks. I had just started watching for a second time. As I lost track.
Finally an easy to understand video of cash flow, much better explanation than other business channels.
My teacher talking for 4 hours straight can't compare to the Plain Bagel.... Thank you for the video!
What a great explanation of a firm's cash flow statement. I really appreciate your videos and insight, your channel is awesome!
Almost 100% accurate auto-generated captions in this speech rate...liked & subscribed.
It was wonderfully explained and cleared my doubts. Thank you from India.
I love your simple and fluid explanation, I'm from Argentina so I have to translate a lot of things to compare them to our financial system (I'm learning fee english business course too lol) and it's awesome!
How you doing
All the best.
Best Video Ever ! Now because of It I know the “secret formula” of a good stock/dividend/bond/etc. market !! I cannot thank you enough Plain Bagel. Keep up with your amazing hard work.
Thank you.
Info
Good info.
Simple. Easy to understand.
Excellent graphics.
CFO
When you mentioned suddenly CFO, I was confused.
Had to pause video and Google it.
Would’ve been nice if a pop up showed, CFO, Cash from Operating Expenses.
Sound
Music unnecessary.
Use best in market audio system.
Again.
Thank you.
Appreciate the info and insights.
I have been watching your videos for a while now. Thanks for spending your time to make these very educative videos. What a great job analyzing the cash flows! I have already subscribed to your channel. Wish you success.
I love the simple way you explained it in!! Thank you for making it so easy
Thank you Richard. It opened up my mind today. So grateful to be able learn what a cash flow is and how it really means to a company how important it is to a company.
Plain and clear, Richard. Thank you :P
Great video. Here...moving from a graduated professional with a masters degree to the new universe of entrepreneurship and businesses ❤🎉
Income Statement can be manipulated using accounting principles for maybe tax purposes or others. It should always be read with cash flow statement when evaluating it.
Would have loved to see you bifurcating free cash flows for firm and equity as well but overall very informative and great video 👍🏻
How is all this so easy for some people? I'm having the hardest time in my accounting class. Thank you for your clear explanation of cash flows.
This deserves a tripple thumbs up!!! Thank you!
If you need an entry level cash flow video this is the best video to watch!
Loved the way cash flow statement is explained... one of the best videos on cash flow statement
I love the Plain Bagel's simplicity in explaining complicated things. Keep up the good work pals... But one thing, Whts VE in the CFF ?
Nice. You got sponsored!
Hehehehehe.
Mma world??
Wow thank you for this illustration, very comprehensive but concise. I am going to watch it again :)
“Cash flow tells the story of how a person handles money.” - Robert Kiyosaki
And Kiyosaki's management is very poor, considering he's 1.2 billion in debt
@@uwuwgrhdhwjno his liquid debt is 1.2b but it’s not real debt as it’s a fraction of his net worth
I saw your video - & @ 3.23 - I scrolled upwards & hit the like button. Nice work. Well done. Hope to see more & more content from your channel. 👍👍
The fact that nobody talks about the forbidden book 25 Money Secrets From Donald Trump speaks volumes about how people are stuck in a trance
I personally like to look at cash flow but going back and removing depreciation. That way your getting the operating earnings and still recognizing the need to spend capx.
a rare, nice and brief explanation of cash flows, thank you. i would like to have such a video on "published accounts and its importance in a business", likewise i would love if plain bagel posts some good videos on "strategic management" comprising these topics specially, "strategic analysis, choice and implementation". thanks again
At 0:25 did you mean to say "because unrealized capital losses"? otherwise i dont understand the example
Lovely Explanatory video on a complex CFS topic.
You empower me dude, love The Plain Bagel!
youve completely change the way i think about finances' great work
very quick and concise explanation! thank you
I've been debating with myself whether to use FCFE or FCF, this cleared it up. Thanks a lot!
FCFE if you’re valuing the stock, FCF if you’re valuing the enterprise! As a shareholder you only care about the FCF after it’s paid off debts (so FCFE) because you don’t get the debt money
God bless you for putting it in such simple words. 👍👍
This deserves a high five! well done!
You are doing an amazing service for all the brain dead newbies who should have started earlier. Thank you for all the hard work you do to create this channel.
It was really helpful ❤️❤️❤️❤️
At 6:40 you say that the companies have earnings of $10M, but each of the cash flow statements presented later show a net of $1M. Was this a mistake, or is there something else they could make money from?
The two won't equal each other because they are measuring different things. Earnings include things like depreciation that aren't included in ANY of the cash flow numbers. Hope that clears things up!
Cash from financing activities is connected to FCF. if it is negative, will there really be a FCF?
Liked, subscribed and this comment to tell how much I appreciate your videos. Thanks ma bagel!
I appreciate you brother Richard, all love my G
Fantastic video! If I were a little younger this would have been a godsend in my finance classes
VET, ACH, QNT, LINK, XRP, XLM, ADA📈🚀
hi richard, was so easy to understand the basics of a acash flow statement. can u help with detailed reading of a cos cash flow statement with a live example..pls will be highly appreciated . i am struggling right now with a cash flow statemnet
thanks man really appreciate the help. Probably still going fail my exam but thanks
Planning to study economics next year. I hope I can use your videos to help!
This is the explanation that I needed!!!! Seriously, thank you!
Best explanation I've seen. Thank you!
Could you explain the working capital effects in the free cash flow?
This was great! Always nice to go over the basics!! 👍🏾
Hi! I just noticed a problem with your example in the end video. The net income (net change in cash) of each company should be $ 1 million, instead of $ 10 million. Right? By the way, your videos are amazing as always (animation is improving too!) :)
Simple, lucid and clearly presented. Liked :)
Best content by the Best teacher!
Wow man what a great video. I agree, I put most my emphasis on a company's cash flow statement.
What is operating cash flow (OCF)?
Is it the same as CFO?
Best cashflow video ever
Wallmine looks cool, however one thing to be cautious about is the short time frame for the fundamental data, as it goes back 3-4 years max. However, the non-long term data looks pretty neat.
Thanks, this was very helpful (From Angola)
Good explanation.
Keep ur work
Love it.
From Malaysia
👌👍
Great Explanation Sir.
Thank you for the very clear explanation.
Thanks for such a clear and simple Explanation
Keep making :)
Love the video. There are a couple of things I do not understand. 1) At 4:40 you are talking about +CFF and -CFF but the graphics show +VE and -VE. What does VE stand for? 2) at 5:18 we have OCF - Capex. Operating Cash Flow was not mentioned previously in the video. CFO, Cash Flow from Operations was mentioned. Are they the same? And at one point “Capex, or CFI which is the money a company spends on long-term assets like...”. So is Capex the same as CFI? Or is Capex only a part of what is included in CFI? Thank you!
+ve/-ve are just shorthand for positive and negative! Yes OCF and CFO are the same (I think OCF is used instead more commonly because CFO also stands for Chief Financial Officer). Capex and CFI are similar, but Capex is just a cost; it's how much the company has invested in assets. CFI includes both costs and gains from investing in assets (like Capex) but also gains from selling assets.
Hope that clears things up!
supreme explenation and presentation . thank you very much
well done at least i now know what cash flows are
Great short and sweet explanation - CASH IS THE KING!
could not be more clear!
great video.
Please cover CAPM and Dividends Multiples , Derivatives, SWAPs, Fair Value/Valuation of Liabilities Vs amortized cost, WACC, Short Selling, Hedging (vanilla, butterfly, etc).Effective interest rates /IRR
Richard, please also make a video explaining Income Statement and Balance Sheet. Keep up the good work! Thanks
Excellent explanation
Great video ! Complex topic explained with much ease for the viewers.
Awesome video! One question regarding FCF at 5:48 :
Why is it CFO-CFI only? Why not CFO- minus CFI and financing activities?
With FCF, we’re trying to figure out what a business is able to produce from operations. The figure represents the money available to the stakeholders (“free” as in available and not committed to a liability). The financing cash flows can sort of be viewed as what’s done with the FCF (ie is it paid back to bond holders or shareholders?). Hope that clears it up!
@@ThePlainBagel Yes! Thank you :)
That was a great breakdown
What does “ve” stand for in 4:38? Thank you.
Remember: businesses go insolvent when they run out of cash, not when they become unprofitable.
once you learn how to precisely triangle all deficit variables to stimulate influx AND tangible data you're in the game
Thank you!
This was very helpful
Absolutely amazing video and explanation! Thanks Plain Bagel :D
Such a great video! Thank you for the help
Excellent...simple and effective
Net change in cash for period was positive for the entire year
I just took my operating activities and subtracted it from the other two and was positive
Thank you infinitely. This has been really helpful!
This is wonderful to say the least
Great work
You do an amazing job at explaining this stuff. Ty!
Great..
May you advise how go get online accounting/finance degree from USA?
I'm from Iraq (MENA) so international standards is what I seek to have better opportunities in future.
Moreover, pls advise if you prefer getting IFRS certificate or an online degree as college?
Perfectly explained. Thanks a lot!
Fantastic video - clear explanation
I love a good plain bagel
Ew
first vid i've seen by you, definitely going to check out some more, thanks for the informative content