We're now ready to use our core modeling techniques to build up the cash flow statement.

Some items will already be a flow such as net income.

If we go and grab net income, that's already a year's worth of inflow and in a simple world that would be a cash inflow, but it's not.

There are other flows contained in net income that are non-cash, such as depreciation and amortization.

So if we go to our base calculations and grab depreciation and amortization and then make sure they're positive 'cause we're adding them back, now we have something more approximating than net income, which is cash-based.

There will be things that are operational that are not captured by the P and L-O-W-E-C is a good example.

This is where our earlier calculation comes in very handy.

We can now look at it and say, if there's a buildup of an operating asset net asset there that will represent a negative inflow as in an outflow.

You can see that if I do that and then do a sense check.

Okay, let's just look at the two again.

OWC is going up, so you could think about that as purchasing inventory.

Okay, having raw materials, receivables, that kind of thing.

And that on a cashflow basis causes an outflow because axo is worse off.

Let's do that again for other long-term assets.

Now you can see it's come out as zero and is based on E 82 and F 82. So if we take a look, it's because those two figures are the same.

Best practice would be to give that a quick stress check.

So let's bring that up manually to 1900. Take a look.

Yes, that costs us money. That's good.

And then control Z will unwind that stress check.

If we leave zeros like this, then if we reuse the spreadsheet or end up changing things and they're no longer zeros, that may have hidden an error.

So stress checks are fairly desirable when zeros come out.

The other non-current liabilities as the first liability flow that we're having to build, and now we will go the opposite way because we'll say a buildup will be good for cash.

We can now add up the cash flow from operation and move on to investment.

The CapEx is already a flow within the PP and e.

We just need to make sure that it's an outflow.

The change in long-term investments will be, again, left minus right, IEA buildup would be bad that results in a zero.

And so really we should stress check that.

But in interests of time we won't.

And now we have investing activities.

The change in long-term debt, we could grab from our assumptions given that it's already a change.

But given that we've been doing everything else from the balance sheet so far, let's go ahead and do that now. It's a liability so when it builds up, We end up with an inflow and that represents us borrowing money.

The dividends we can grab from our base, carefully check it.

It's already a negative so we don't need to do anything to it.

And there we have the cash from financing.

We're now ready to unify everything in the cashflow statement.

The cash rate statement itself has a kind of base at the end where we say, okay, we are going to put together a sweep.

We are going to imagine that in the last year end, the sweep was already there and so we're gonna net out cash and short term debt.

So were we in a situation where we could have either shortterm debt or cash, then we would use any available cash and sweep it into the short term debt and end up with short-term debt of six 20.

And if we dwell on the two figures that makes sense, we would use all available cash to set against the short-term debt and end up with short-term debt of 600, which is what that number represents.

We're gonna use that logic going forwards and we're going to say we will arrive at the start of 2024 with our slightly simplified either or situation, either cash or short-term debt.

When we put together all three cash flows, we find that we're a thousand better off, and that means that we can sweep that thousand straight into that short-term debt and end up with a positive cash balance of 4, 6, 5.

And that gives us great confidence because that was our imbalance.

So you can see we're tying up loose ends here.

What we need to do now is convince the model in a flexible way to take that figure and put it in either cash if it's positive or short term debt. If it's negative. And we really don't wanna hard code that or just copy it in manually because the model may change dramatically if we reuse it.

So what we're gonna do is we're gonna say max of that figure and zero.

Now what that'll do is fetch that figure if it's positive and effectively ignore it.

If it's negative, we're then gonna do the same, but with a min, I'm gonna say if that's lower, grab it.

Or if zero is lower, grab it. Okay, we'll press enter.

That seems to be working.

But as be usual with zeroes, we'd quite like to stress check that.

Now, if I force a bad year on Axo in 24, you can see that it reveals an error.

Now I've done that on purpose. It's quite a common error.

What I need to do is flip the sign, okay, that's now working.

I now need to unwind my error.

And we find that the, the short term debt disappears and I can get rid of this formatting.

I'm now looking to the balance check, finding that it's balancing and that gives me confidence because I'm close to tying up my operational model and one step close to my valuation.