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

tikfed

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

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.

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