The pandemic has had a big impact on lots of companies…. especially the airlines. When I saw the huge $12 billion loss that Delta Air Lines reported for the nine months ended September 2020, I was curious to see what’s going on with their cash and cash flow.
In my view of the world, cash is the real bottom line in business. So, anytime I review the financial results of a company, I always start with looking at the three largest drivers of cash using the Cash Flow Focus Report.
If you define cash flow as the change in the cash balance for the period, like many people did in my cash flow definition survey, then Delta Air Lines had what appears to be a fantastic nine months. Their cash balance went up by $19 billion. They had $3 billion at the end of December 2019 and $22 billion at the end of September 2020.
BUT… I take a VERY different approach than most people to defining cash flow. I define cash flow simply as HAPPINESS. And it (your happiness with your cash flow) is measured on a scale of 1 to 10.
The image below shows you the 3-step process.
Here is a link to the blog post where I walk through this simple process for understanding the cash flow results at Delta Air Lines for the nine months ended September 2020.
I found the cash flow results very interesting. 😊
NOTE: You can grab a copy of my newest book at Amazon.
A Quick Start Guide to Financial Forecasting: Discover the Secret to Driving Growth, Profitability, and Cash Flow Higher provides a straightforward, easy-to-understand guide to one of the most powerful financial tools in business: a reliable financial forecast. It will transform the financial future of your company and help you make better business decisions. Get the book at Amazon.
Comments