Abstract
This paper first elaborates on the importance of cash flow in building a comprehensive financial indicator system. On one hand, it is the relationship between cash flow and the assessment of the company’s solvency, profitability, and operating ability. On the other hand, it is the theoretical basis of financial analysis based on cash flow. We then introduced the construction principles of the financial analysis index system based on cash flow, and lastly analyzed the financial data of Xiaomi for empirical research.