Cash flow is the lifeblood of a business and deserves more in-depth analysis.

Often when it comes to cash flow, there's usually a lot going on. However, there are two metrics that you can calculate and look at quickly to give you an idea on cash flow.

The first places I look for a good sense of what's happening with cash flow is days sales outstanding, which is called DSO and days payable outstanding (often called DPO).

The average number of days a company takes to collect the accounts receivable is the day's sales outstanding or DSO. The average number of days it takes a company to pay its trade creditors is the days payable outstanding or DPO. 

You've probably identified at least one source of your cash flow problem if you pay your trade creditors appreciably faster than you collect your receivables.

Now, day's sales outstanding or DSO, this metric is calculated by taking your accounts receivable as the enumerator and total credit sales as the denominator.

Then multiplying that quotient by the number of days you are tracking, you will and you will get your dso and you take the accounts receivable number right off of your balance sheet. 

When making a quick assessment of a cash flow problem, the DSO and DPO are the go-to metrics.

Let me give you a macro example of this: if you are collecting your receivables on an average of 30 days represented by the day's sales outstanding calculation, but you're making your payables to your trade in 20 days represented by the day's payable outstanding calculation, then you are going to be running into a cash flow problem in all likelihood because it's taking you 30 days to collect, but you're paying in 20.

And that is what I mean by these two metrics being go-to cash flow metrics.