Correction on Cash Flow Accruals Ratio reported, equation, wrong, correct

soverby

Schwaser recorded the equation for cash flow based accruals wrong.

The correct equation is (NI - CFO + CFI)/(NOA end - NOA beg)/2


NOT (NI - CFO - CFI)/(NOA end - NOA beg)/2 as reported in Schwaser

zephyranalyst

You guys are all posting bad info

the denominator is (NOAbeg + NOAend)/2 =>Avg NOA

The numerator is NI-CFO-CFI the reason you added it is because it must have been a cash outflow

SpyAli

the scweser formula is right, however , cashflows from investments are usually negative, so you add them instead of subtracting them.

sameeragarwal

no such thing as usually.

tikfed

@#$%&, both results are the same.