MPI - Operating Cash Flow

After analyzing MPI's balance sheet and income statement, we now go to its cash flow statement.
Cash flow statement has three parts: Operating, Investing and Financing, but I will focus only in the Operating cash flow.

Cash Flow from Operations
This is the key source of a company's cash generation. It is the cash that the company produces internally as opposed to funds coming from outside investing and financing activities. In this section of the cash flow statement, net income (income statement) is adjusted for non-cash charges and the increases and decreases to working capital items - operating assets and liabilities in the balance sheet's current position.

Read more: Analyze Cash Flow The Easy Way | Investopedia http://www.investopedia.com/articles/stocks/07/easycashflow.asp#ixzz4OMrfCCfZ
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Based on the operating cash flow of MPI we can see that it finally bounced back from the negative territory last 2014. The increase was mostly attributed from the increase in its Income before tax which grew 20% from 2014-2015. Its cash flow per share which measures firm's financial strength also increase in 2015.




Basically Cash flow per share tells us how much cash each share generates. Same as Earning per share although EPS might be inflated since Net Income includes sources other than cash.

MPI never miss in declaring dividends and it increased in volume recently especially last 2014. Earning per share is still increasing at a double digit growth and as a side note BSP released its projected inflation at 2.9% and our projected GDP at 7% so we can expect a 10% growth in dividends next year.

I would like to add the above ratio in the analysis especially with #1 and #2. MPI is expanding aggressively for the past 3 years which is evidenced by declining rates of the said ratios. We don't want to invest in a company that has too much debt because its more risky. But as I discussed in my previous posts, MPI's expansion is aligned with the demand in the industry because of the significant focus of the government to public spending and the revamping of Philippine's infrastructure. More demand just means more growth for MPI. Also as an additional note, the focus of the current administration to improve our provinces could mean an additional revenue on MPI's toll roads and expressway. 

Parting notes

This is the last part of my MPI analysis and I hope you guys understood the whole thing. This is my first time posting an analysis and I do hope it wasn't confusing or complicated. Next month would be another company and I'm thinking of doing BDO since it's the 2nd in my top 5 company to invest. So see you again guys next week for another analysis hope my analysis helped you in deciding whether MPI is a good investment. GLHF.