Cash flows statement ratios analysis and interpretation : case of sonatrach group's Algeria

Abstract EN

The objective of this study is to highlight the importance of cash flows statement witch become an integral part of financial reporting and acts as a bridge between the income statement and balance sheet, to determine the company strengths and weaknesses and to judge it financial performance.

Cash flows statement provides new indicators and ratios to measure liquidity quality, solvency and its ability to change in assets, liabilities and equity.

Otherwise, the study should to stress the importance of cash flows information for predicting financial failure and bankruptcy risk.

The purpose of this study is to calculate and interpret the cash flow ratios by taking the case of SONATRACH Group’s.

The results of study concluded that cash flows ratios absorbed by SONATRACH’s company is good enough which indicates the higher and company’s true performance, and the positive sign of financial flexibility.