Net cash flow from operating activities to net profit ratio (TTM)
factor.formula
Net cash flow from operating activities to net profit ratio (TTM):
in:
- :
The net cash flow generated by operating activities in the last 12 months (rolling). This indicator reflects the net amount of cash inflow minus cash outflow generated by the company's main business activities, excluding the impact of investment and financing activities. TTM stands for Trailing Twelve Months, which means rolling 12 months of data. Using rolling data can more smoothly reflect the company's recent operating conditions and reduce the impact of seasonal factors.
- :
The net profit of the last 12 months (rolling). This indicator reflects the total profit earned by a company through operating activities over a period of time, deducting all costs and expenses, and is a key indicator for measuring the profitability of a company. TTM stands for Trailing Twelve Months, which means rolling 12 months of data. Using rolling data can more smoothly reflect the company's recent operating conditions and reduce the impact of seasonal factors.
factor.explanation
The ratio of net cash flow from operating activities to net profit (TTM) reflects the degree of match between the cash inflow and net profit generated by the company's main business activities in the most recent 12 months. The higher the ratio, the higher the cash content of the company's profits and the better the profit quality. When the ratio is greater than 1, it usually means that the company's profits have strong cash support and the profit quality is high. On the contrary, if the ratio is less than 1, it means that there is a part of the company's current profits that has not yet realized cash inflows, and there may be risks of poor profit quality and insufficient cash flow. In particular, when the ratio is significantly less than 1, it is necessary to be alert to the possible financial risks of the company, especially for companies that rely on cash flow to maintain operations. A ratio that is too low may lead to a liquidity crisis.