ANC regulation 2022-06, applicable from January 1, 2025, changed the classification of asset disposals. They now move from exceptional accounts (675/775) to operating accounts (657/757). This change has a direct impact on the calculation of self-financing capacity (CAF).

The ANC recommends the indirect method for cash flow calculation, which starts from net income and proceeds through successive adjustments to neutralize non-cash items. This method is commonly used in practice, unlike the direct method recommended by IAS 7 but rarely applied.

The Debt Service Coverage Ratio (DSCR) is a key indicator that measures a company's ability to meet its debt repayment obligations. It is calculated by dividing EBITDA by the total debt service. A DSCR below 1 means that operating revenues do not cover debt service. The minimum threshold generally required by banks is 1.25.

IAS 7 classifies cash flows into three categories: operating, investing, and financing. Operating cash flows include receipts and payments related to the main revenue-generating activities, such as customer receipts and payments to suppliers. Investing cash flows relate to acquisitions and disposals of long-term assets, while financing cash flows reflect changes in capital structure and borrowings.

Self-financing capacity (CAF) is a financial indicator that measures a company's ability to generate internal resources without resorting to external borrowing. It is calculated by adding depreciation, amortization, and provision charges to net income, then subtracting provision reversals and disposal proceeds. The benchmark thresholds for healthy self-financing capacity are 5% of revenue for companies subject to personal income tax and 15% for those subject to corporate tax.

Operating cash flows include receipts and payments related to the main revenue-generating activities, such as customer receipts and payments to suppliers. Investing cash flows relate to acquisitions and disposals of long-term assets, such as tangible or intangible fixed assets.

The interest coverage ratio measures a company's ability to pay its interest by dividing operating income by financial charges. A prudential threshold generally set at 3 is considered acceptable. A ratio below this value could indicate potential difficulty in meeting financial charges.

The debt-to-self-financing capacity ratio, which divides financial debt by self-financing capacity, is a key indicator of repayment ability. A ratio below 3 is considered healthy, while a ratio between 3 and 4 is acceptable, and a ratio above 4 indicates potential difficulty in obtaining new financing.