Net operating cash flow/net increase in cash and equivalents ratio (TTM)
factor.formula
Net operating cash flow to net increase in cash and cash equivalents (TTM) ratio = Net operating cash flow (TTM) in the last 12 months / Net increase in cash and cash equivalents (TTM) in the last 12 months
The formula calculates the ratio of net cash flows from operating activities over the last twelve months to net increases in cash and cash equivalents over the last twelve months.
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The net cash flow from operating activities for the trailing twelve months (TTM) represents the net amount of cash inflows from the company's main business activities during the reporting period after deducting cash outflows. A positive value indicates a net cash inflow from operating activities, while a negative value indicates a net cash outflow from operating activities.
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The net increase in cash and cash equivalents for the trailing twelve months (TTM) represents the net increase in the company's cash and cash equivalents from the ending balance to the beginning balance during the reporting period. This value may be positive or negative, reflecting the changes in the company's overall cash flow.
factor.explanation
This ratio is designed to measure the proportion of cash flow generated by a company's operating activities in the company's overall cash flow. A higher ratio usually indicates that the company's cash flow mainly comes from its main business, rather than other activities such as investment or financing activities, suggesting that the company has stronger profitability and a healthier cash flow structure. This indicator can be used to measure the quality of a company's cash flow and assist in determining whether the company's business model is sustainable. If this indicator is too low, it may mean that the company's cash flow comes more from non-operating activities and requires further analysis.