You would use the income statement and balance sheet. The income statement shows the profitability of the company, and can display key metrics like revenue growth, gross margin, and EBITDA margin, which are key to understanding and valuing a business.
We should use the balance sheet if we have more than two years of data. This is because you can effectively figure out the changes in cash flow and net income by comparing this year’s balance sheet with the previous year’s balance sheet. Any change in the balance sheet will be reflected somewhere in the cash flow statement.
The change in cash can be calculated as this year’s cash balance less last year’s cash balance.
We can figure out changes in net working capital by looking at the increases in operating current assets like accounts receivable and inventory, which represent deductions to cash flow. Increases in operating current liabilities like accounts payable represents additions to cash flow.
We know the depreciation and amortization from the income statement, so we calculate capex using this year’s PP&E and last year’s PP&E. This year’s PP&E = last year’s PP&E + capex – depreciation and amortization. We can then isolate for capex. Capex = this year’s PP&E – last year’s PP&E + depreciation and amortization.
If we look at the changes in debt from one year to another, we can calculate the cash flows from new borrowings (debt goes up, cash inflow) or debt repayments (debt goes down, cash outflow).