| When you are considering investing in stocks, you | | | | activities. You should be interested in Cash Flow from |
| need to do a little research on the earning record of | | | | operating activities. This is the actual cash the |
| the company. If a company doesn't have a consistent | | | | company is generating from its business. |
| record of earning in the past, you should remove it | | | | Cash flow from investing activities is the cash flow |
| from the list of stocks you are considering for investing | | | | from investment in financial instruments or cash used |
| your money in. This research is easy to do, just pick | | | | by investment in capital assets. Cash flow from |
| annual reports of last few years and read them. If you | | | | financing activities is the cash flow resulting from |
| don't find annual reports, use Google and find a web | | | | issuing dividends, borrowing or paying debt and issuing |
| resource from where you can get last ten years | | | | equity. If the company is not able to fund its growth |
| record of listed companies. | | | | from the cash it is generating from business, it may not |
| Ideally, a good stock for investment should have a | | | | be a very healthy sign. However, if the company is in a |
| consistent record of earnings for the last ten years. | | | | start up phase or is thinking about big-ticket investment, |
| Many companies do well for two three years and then | | | | it may have to fund its growth through loan or |
| they go awry. Do not trust these companies with your | | | | issuance of stocks. You need to make a judgment |
| money. One more thing that makes a company | | | | based on your analysis of the situation. |
| attractive for investment is if it has been growing its | | | | Understanding the stability and growth of earnings of a |
| earning over the years. That says a lot about the | | | | company helps you decide whether you should |
| future potential of the stock. | | | | consider the stock of the company for investment or |
| You should also see how much cash is coming from | | | | not. Apart from earning stability and growth, you also |
| the operating activities. This information can be found in | | | | need to analyze dividend payment record, |
| the Cash Flow Statement. There are three heads of | | | | management quality and intrinsic value of a stock, |
| Cash Flow Statement- Cash flow from operating | | | | before you decide on picking a stock for investment. |
| activities, from investing activities and from financing | | | | |