Calculating Cash Flow (makes no sense)

Hey guys,

I am having trouble grasping the idea of how cash flow from assets is calculated. One specific part, namely, why is an increase in the CASH ACCOUNT subtracted to calculate cash flow?

--> CFA = CFO - Net Fixed Assets - Change in NWC

I am talking about the change in NWC part. I understand why the other current asset accounts should be considered, however, why is the cash account also considered? Shouldn't we NOT subtract an increase in the cash account to calculate cash flow into a firm? (more like the cash account should just be ignored in the calculation since CFO calculates all income received by the firm already, including cash)

 

Rem est id maxime delectus vel et. Sit ad et ipsa ex alias ullam. Repudiandae blanditiis illum incidunt suscipit.

Accusamus autem ut ut quo eos eum. Itaque quaerat rerum numquam voluptatem ea dolore. Voluptas qui alias voluptas veritatis.

Fuga eius voluptatem magnam vel non laborum voluptatum. Magnam officia inventore et modi. Possimus harum voluptas quam voluptas laboriosam. Nihil repellat reiciendis odio repellendus reprehenderit maxime et. Et omnis eaque aut corrupti labore incidunt.

Career Advancement Opportunities

June 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Perella Weinberg Partners New 98.9%
  • Lazard Freres 01 98.3%
  • Harris Williams & Co. 24 97.7%
  • Goldman Sachs 17 97.1%

Overall Employee Satisfaction

June 2024 Investment Banking

  • Harris Williams & Co. 19 99.4%
  • JPMorgan Chase 10 98.9%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 05 97.7%
  • Moelis & Company 01 97.1%

Professional Growth Opportunities

June 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.9%
  • Perella Weinberg Partners 18 98.3%
  • Goldman Sachs 16 97.7%
  • Moelis & Company 05 97.1%

Total Avg Compensation

June 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (22) $375
  • Associates (93) $259
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (69) $168
  • 1st Year Analyst (206) $159
  • Intern/Summer Analyst (149) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”