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How to check the cash position of a business?

Others 484 views 1 replies
I am an investor and have little knowledge of accounting statements. I usually check the cash position of a company by verifying whether the cash from operations is a positive figure or not. I also check the reserves in Balance sheet. I make sure that cash from financing and investing are not too much positive figures. But as a professional, how do you actually examine the cash status? Where can you check the total cash available in a zero debt business ? Does it reflect in just reserves and surplus? Tell me the professional way.
Replies (1)

The Cash position of the company can be assessed by going through the free cash flow of the company. Loss and profit balance sheet may not provide right picture as the profit of the Company may be blocked in different assets which cannot be easily liquidated hence the best source is to go through the cash flow and find out how much is free cash flow.

 

By study balance sheet of a company. For further details one needs to check and compare with previous 2/3 years balance sheet. Look for sales growth, profit growth, Reserve, debt etc

 

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