Dual cash flow

“Dual cash flow” is computed as part of the “tabulate ratios ” function. Here is the dual cash flow section for Intel:

“Dual cash flow” separates the operating cash flow from the balance sheet cash flow. The idea is to figure out where a company’s cash flow is coming from, either operating income or the balance sheet.

1. Change in net worth is simply the net worth for the current period minus the net worth for the prior period.

2. Change in growth-producing assets measures the change in property, plant, equipment, inventory, and acquisitions from the prior period.

3. Operating cash flow is simply change in net worth minus the change in growth-producing assets. It is different from operating cash flow as computed in the free cash flow section.

4. Balance sheet cash flow is computed by subtracting the change in accounts receivable from the change in current and long-term liabilities.

5. Dual cash flow is simply operating cash flow minus balance sheet cash flow.

Each of the above computations is also expressed as a percentage of current period sales.

Gordon Gerwig, founder of Spredgar Software, has a B.S. in Electrical Engineering and Computer Science from the University of California at Berkeley and an M.B.A. in Finance from the University of California at Davis. Gordon Gerwig and Spredgar Software have been written up in Online Investing for Dummies, Online Investing Hacks, and in the Innovator, the U.C. Davis Graduate School of Management's alumni magazine. Gordon is an individual investor and a member of the American Association of Individual Investors (AAII). He is a CERTIFIED FINANCIAL PLANNER, a Licensed International Financial Analyst (LIFA) , and is an associate member of the CFA Institute. He has worked in financial services as a advisor for Morgan Stanley and American Express. He has experience in small business lending, valuation and consulting. Spredgar Software's mission is to provide unbiased financial investment data through Excel add-in software for the private investor, the professional analyst, and the academic.