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I subscribed to one technical analytics service for the stock market. Here is one company whose fundamental indicators, I was looking at.

Below is the fundamental analysis comparison of peer companies and the current company : Fundamental indicators of Rajesh Exports

Operating cash flow of Rajesh Exports

I can see that under the earnings quality section,the company has reported negative growth in Operating Cash Flow Yield and Accruals.

Still, the analytics company has maintained a positive outlook about earning quality.

My question is :

  • as per my understanding, negative operating cash flow yield means bad for a company? Am I correct?
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    depends how negative and what the plan is to correct that. – Robert Longson Jul 25 at 17:52
  • @RobertLongson : can you please explain a bit ? – DukeLover Jul 25 at 17:53
  • Company is worth $1billion, cashflow is negative by $1 for one year and next year resumes growing. Would that company be in deep trouble? – Robert Longson Jul 25 at 17:55
  • Is it a one-year drop in cash flow and revenue, or multi-year? – RonJohn Jul 25 at 17:56
  • @RonJohn : it is one-year drop – DukeLover Jul 25 at 17:57
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Negative growth is not a bad thing, especially for only one year. It just means that their cash flow was lower this year than last year. Now if cash flow itself goes negative, that could be a bad sign, but again not necessarily time to panic.

Both are negative indicators (meaning that it's better to have positive growth than negative), but neither necessarily means a company is "in trouble".

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reported negative growth in Operating Cash Flow Yield and Accruals.

it is one-year drop

A one year drop is just that: one year.

What's the long-term trend? Is there a history of up and down years, but mostly up? It might be in a cyclical market where this is expected.

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