Community Discussions
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How important is the cash flow for a company? Should I really take it into consideration when buying stocks?
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So, I have a list of companies that I’m interested in investing in, some of them has negative cash flow, is this a red flag?
One company is great and I think it has a very good future “increase profit and sales” it also has stable dividend in the past.
However, it has negative cash flow, is this concerning ?
Should I avoid companies with negative cash flow?
Thank you so much.
Top Comment: Free cash flow is one of the most important metrics, much more than P/E. However, no one metric tells the whole picture. If you look at AMZN FCF & P/E now or in the past, you would never buy, even though it may be one of the best investments around (in the past definitely)
What do you consider as positive cash flow?
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I am considering renting my house in California. The mortgage is $4300 a month. I currently have $700-800k in equity. Rent market rate is $5500-6k a month. Is that enough positive cash flow to make it work?
Top Comment: $700k in some HYSAs might bring you in approximately $35k per year or 5%. This is more than what you would bring in renting the house, essentially risk free. Certainly this doesn’t factor in realtor fees/commissions, taxes, etc. One thing is for certain, after seeing the horror stories about renters in CA, I would not want to be a landlord there.
Cash flow positive investment properties
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I know the market is super hot. Are there any cities to invest in Canada where mortgage + maintenance fees = rent ?
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There are surely opportunities in every city. I’m based in Kingston and regularly help clients obtain properties that are $2-400 cash flow positive even with management fees at 20% down. These are mostly single family homes with an additional unit. There are even several 3+ unit buildings available now that are cash flow positive.
Is $400 a month positive cash flow worth the investment
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Considering investing in a duplex with $400 positive cash flow. It it rented now but would keep the option to live in it later and refinance. I understand that regardless of the cash flow it is still building equity. But, does it make sense as an investment when weighing down payment, interest, cost of maintenance etc? It seems like it would take a long time to recoup even then down payment. Am I looking at this wrong?
Top Comment: Hard to give advise with such little information. If the property costs 10k then it's a great deal. If it costs 1.5mil then it's a horrible deal
Positive cash flow for the city treasury
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I just started playing not too long ago and always struggle keeping the cash flow into the city’s treasury positive. I’ve had a few cities go bankrupt already and had to restart.
What are some tips or methods to use to keep the cash flow into the treasury positive? I’d like to eventually be able to not have to worry about it and always have the money I need to make upgrades, buy new stuff, etc.
My current, and largest city I’ve ever had, is currently at a population of around 8,000.
Thanks!
Top Comment:
Up taxes. They'll happily pay up to 12%.
Use your budget. Example, Turn down the budget of your power plant and gently nudge it back up as you need more power (also applies to police, healthcare, fire, schools). You're paying for 100% but you might not even be using 50% of the power output in the beginning months.
Go slow, dont layout your entire street grid without demand. Every tile costs money to build AND maintain.
Keep it simple. Sure roads with grass or Avenue's with trees look nice but they're also more expensive to place and maintain.
Plan ahead, reserve space for that highway/avenue/offramp you are planning but cannot afford yet. Relocating costs money.
What are the ways a company can have negative net income but a positive cash flow?
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From what I understand, this is due to the difference between accrual accounting and actual free cash flow.
I understand the difference between those two things, but how does this end up causing a loss and positive FCF? What are the most frequent ways companies do this(especially tech companies, as they started the trend)?
Top Comment:
If you look at a Cash Flow Statement on any public company’s 10-K filings it will show you, line by line, how to go from earnings to cash. Almost every company uses the Indirect method for their cash flow statement which starts with Net Income and then adjusts each line to get to cash.
Choose a couple of companies with negative net income and look through their cash flow statements, or if you want to be more specific, use a stock screener to look for Net Income < $0 and cash flow positive.
So, my cash balance is positive but my day trad BP is negative? Should I be worried? It just doesn't make sense to me.
Main Post: So, my cash balance is positive but my day trad BP is negative? Should I be worried? It just doesn't make sense to me.
Top Comment: 55K subscribers in the Webull community. Webull subreddit, a commission-free, stock trading app.
WHAT’s YOUR definition of cash flow! 💰
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I currently own a lawn & landscape business. Profitable but want to get better at managing cash flow as I know that’s super important!
Thank you so much in advance for all the help / advice 🤲🏽
Top Comment: One thing I will tell you is that if you own a small business, don’t look at every dollar you make is being profit because you have to value your time as well The definition of cash flow is very basic but the bottom line is you want more money coming in then going out... but there are plenty of businesses at the end of the year look good on paper but might’ve struggled because the money comes in sporadically causing it harder to pay bills on time and there could be times. A profitable business can end up out of business because of how cash flow works You just don’t have the capital needed to wait for the money to come in and cover all the expenses you have Most of the time when I discuss cash flow with people, it has more to do with having the money come in to be able to cover all the expenses month after month and how it really helps to have a nice amount of money in your bank account so you don’t have to constantly stress it Because it’s pretty common for me to have a month where I lose money, but I still have to pay payroll
Which provinces generally look the most appealing from a cash flow perspective for investment properties?
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I'm in BC and I don't really think I want to invest here due to renting being cheaper than owning in most cities
Top Comment:
Quebec isn't bad. check the smaller cities like st. hyacinthe, sherbrooke, etc.
edit i see my comment is somewhat popular, here's an example of a decent cashflowing quad in sherbrook:
https://www.centris.ca/fr/quadruplex~a-vendre~sherbrooke-les-nations/28048844?view=Summary
gross rent is 39k, and they asking 360k. could probably get it down to 340k or maybe even lower. at 20% down, and 1.8% interest, monthly mortgage is $1126. assume 50% of gross rent goes to all other expenses (conservative) and you'll cash flow :
39,000/2 - 1126*12 = $5988 per year. on a 20% down payment of 68000, that's 8.8% cash ROI on your initial down payment.
if you're a bit more optimistic and assume only 40% of gross rent for non-mortgage expenses, your ROI jumps to 14.5%.