I’ve been going through the Annual Reports of some companies like Airtel, Jet Airways etc and trying to reconcile the Balance Sheet and Cash Flow statements account-to-account. My basic assumption is that the cash flow is the numeric differential of balance sheet figures at two different time points. Apparently, that is not so; I could not reproduce, for example, the final trade payable balance at the Balance Sheet of Airtel by adding cash flow in Trade payable to its last year balance. My question is if cash flow is not what I assume, then how exactly cash flow relates to Balance Sheet? How do investors judge the financial health of the company by these two supposedly related reports?
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