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In addition to being able to use the Gumroad App to listen do the lessons on your smart phone this series of lessons also consists of 58 individual lessons in MP3 format mp3 files of lessons 1-58 covering:

Series 7 Study Guide Audio Lessons 1 to 58

This is the first of two lessons where we deal with understanding the cash flow statement. Because the differences if accrual and cash accounting can sometimes make the results of the company appear better than they really are to accountants came up with the cash flow statement which in my opinion is the most useful financial statement.

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Below is part of the transcription of this Lesson:

We’ve talked about the income statement, the balance sheet, and accrual accounting. And my basic problem with accrual accounting is it can hide a lot of manipulation in the numbers. Admittedly, it makes sense, but you can't fake cash. You can fake earnings, you can fake asset values. Now supposedly, there's people watching these numbers and verifying the validity of these numbers, but I've been around a while. I've seen those acquisitions of managements who’ve paid billions of dollars for be worth nothing. So as I told you, I'm highly skeptical of goodwill as an asset on the balance sheet. So when I look at a cash flow statement, that is the number one financial statement I look at when I'm evaluating a company from a fundamental point of view.

Now, the fundamental point of view is often called a ‘bottoms up point of view’ or a ‘bottoms up analysis,’ but it's an analysis by the numbers. So what you're looking for when you're doing fundamental analysis is, well, the way I look at it is I assume a company’s going to have a series of cash flows – of free cash flows – that could be distributed to the stockholder either in dividends, or in the form of buybacks, or in the form of additional investment by the company to create future cash flows. When I see a company that does not have any free cash flow, then what I'm buying is hope, dreams, blue sky, blue smoke, and mirrors. I consider those speculations as opposed to an investment. I look at an investment as the potential for cash flow to meet my pocket. This is contrary to a lot of popular analysis techniques, and we’ll be talking about those later on, but fundamentally, I'm a fundamental analysis for me and my clients.

Let's talk about what a cash flow statement shows. First of all, we start out with where the money comes from, and then where the money goes, and what we end up with. You can't fake cash. So when you see a company like Tesla spending for every dollar in revenues about another dollar in expenditures, losing money like crazy, how do they do it? Well, that's going to be revealed is the cash flow statement or the consolidated statement of cash, whatever you want to call it.

So you can create a consolidated statement of cash flows or cash flow statement from the income statement and balance sheet. The information is there. Sometimes, it’s not in the consolidated information. You may have to go to the footnotes, because what you're going to be needing is to find those non-cash expenditures that show up as expenditures on an income statement. I'm talking primarily about depreciation and amortization. So a cash flow statement is really a combination of the other two statements, that’s so you can actually see where the money comes and goes……..

I talk about Tesla Motors Cash flow statement for reference I am including the 2015 report below

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