COCR, VFIN, BFL, GRAN, TAFL, etc. are the leading topics being discussed with striking computation of expected future earnings extended by quarterly results. To ensure expected prospects of business, investors can keep one step forward by evaluating the quality of performance indicator of EPS by dividing net cash flows generated from operating activities by the number of ordinary shares issued & paid.
If the cash flow based number (Net operating cash flow per share) is positive & stands higher than reported EPS given in financial reports, it is the sign of real strength of the business going concern within the concept of “cash is the king”.
However, there are certain facts to be considered as cash flows become periodical depend on the nature of business transactions which convert trading activities into cash. Those who prefer to carry out simple homework of this kind, keeping in mind the nature of cash cycle, may be able to see the prosperity of counters said to be strong in stock market.