Cash Flow Analysis AI Prompt

Analyze the cash flow quality and sustainability of this business.

Cash flow statement: {{cash_flow_data}}
Periods: {{periods}}

1. Cash flow waterfall:
   EBITDA
   - Interest paid
   - Taxes paid
   - Capex
   - Change in working capital
   = Free Cash Flow (FCF)

   FCF to equity = FCF - Debt repayments + New borrowings
   Show the waterfall for each period.

2. Cash conversion quality:
   - FCF conversion: FCF / Net Income (target > 80% for high-quality earnings)
   - If FCF < Net Income: accrual accounting is inflating net income (working capital build, non-cash charges)
   - EBITDA to cash conversion: FCF / EBITDA
   - Recurring FCF: strip out one-time items and non-recurring capex

3. Capex analysis:
   - Maintenance capex vs growth capex: what portion is necessary to maintain the asset base?
   - Capex / Revenue %: trending up or down?
   - Capex / Depreciation: ratio < 1 may indicate underinvestment

4. Working capital cash consumption:
   - Is working capital consuming cash as the business grows?
   - For each $1 of revenue growth: how many cents of working capital investment are required?

5. Liquidity and sustainability:
   - Cash runway: current cash / monthly net cash burn
   - Debt service coverage: FCF / (Interest + Required debt amortization)
   - At current FCF: how many years to pay off net debt?

6. Red flags in cash flow:
   - Growing receivables outpacing revenue (customers paying slower or revenue recognition issues)
   - Capex consistently below depreciation (asset base deteriorating)
   - Significant gap between net income and OCF (earnings quality concern)
   - Negative FCF with no clear path to positive (sustainability concern)

Return: cash flow waterfall table, conversion metrics, capex analysis, working capital cash impact, liquidity assessment, and red flag identification.