Victoria's state-owned timber company VicForests has racked up cash losses of $22million since it was formed - equating to a loss of $1.50 for every cubic metre of wood it has logged - an analysis of its public accounts has found.

The review was carried out by the Australian Conservation Foundation's economic unit and concludes the company's cash flow problems and large debt indicate trouble with its core business.

VicForests has rejected damning analysis and claims it delivered overall profits since 2004. Credit:Paul Rovere

But VicForests rejected the analysis saying it has delivered overall profits since it was created in 2004 and generated billions of dollars in economic activity for the state. The state Auditor-General's Office is currently auditing the management of Victorian forests, including VicForests' operations.

The report was commissioned by the Healesville Environment Watch, which is campaigning against native timber harvesting. The group's chairman, Steve Meacher, said it would be submitted to the Auditor-General to be considered in its review.