- A company must be ranked in the bottom 35% of all companies within their sector for (total debt 1Q/free cash flow t12m) and free cash flow MUST be a positive number.
- Yearly Operating Cash Flow is greater than it was two years ago
- Quarterly Operating Cash Flow must be higher than five quarters ago.
- A company must be ranked in the top 45% for their Trailing 12 month Cash Delta divided by the average diluted shares.
- Quarterly Operating Cash flow as of two quarters ago, must be higher than operating cash flow six quarters ago.
- A company must be ranked in the top 45% across their sector for their Free Cash Flow Per Share (FCF/Average Diluted Shares)
- Cash EPS one quarter must be higher than Cash EPS five quarters ago
- Trailing Twelve Month Free Cash Flow(FCF) must have increased by 15% over the past year
- A company must be ranked in the top 45% of all companies within their sector for their trailing twelve month Cash EPS
- Quarterly debt must have dropped by 10% over the past six months OR Diluted Shares outstanding must have dropped by at least 3% over the past year.
Investment Green Flags – High Cash Flow Score
Now, this flag looks incredibly simple, but whenever you see orange text in Equities Lab, it means that there is a deeper formula to explore. Clicking on that formula we are presented with the following – Though the flag itself is simple, the underlying formula is not. Understanding and analyzing cash flow statements takes time. Thankfully, we can do it easily here by importing the Cash Flow Score – a number from 0 to 10 based on the above metrics. For each line that is true for a company, it will score 1 point. The lines look for the following –