When you need to gauge the potential financial success of a company, the amount of cash that it has on hand is one factor to consider. Retain cash flow is a metric that looks at the net increase or decrease of cash that a company holds from one period to the next. If you want to calculate this statistic, get a copy of the statement of cash flows from the previous two accounting periods and it should give you the information you need.
Obtain a copy of the statement of cash flows from the company that you want to evaluate. This information is typically available on the company's website or if it is a publicly traded company, it is available through the United States Securities & Exchange Commission. Get a copy of the statement of cash flows from the most recent period as well as from the previous period.
Locate the amount of cash flow before any items are subtracted out.
Subtract the dividends paid out of the cash flow amount for each statement.
Determine the difference between the figures from the two statements. For example, if you get $200,000 after subtracting out the dividends from the most recent statement and $150,000 after subtracting out the dividends from the second statement, the difference is $50,000. This tells you that you have a positive amount of $50,000 in retained cash flow.
Luke Arthur has been writing professionally since 2004 on a number of different subjects. In addition to writing informative articles, he published a book, "Modern Day Parables," in 2008. Arthur holds a Bachelor of Science in business from Missouri State University.