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Cash Flow Statement: What It Is and Examples

July 17, 2023
Bill Kimball

To perform a cash flow analysis, you can compare the cash flow statement over multiple months or years. You can also use the cash flow analysis to prepare an estimate or plan for future cash flows (i.e. a cash flow budget). This is important because cash flow is about timing – making sure you have money on hand when you need it to pay expenses, buy inventory and other assets, and pay your employees. When your business suddenly needs cash money to expand, pointing to a high annual income or an office full of expensive systems doesn’t pay the bills. A cash flow statement gives you insight into the liquidity of your company so you can tell if you have enough available cash to do what you actually need to do. A cash flow statement is one of the three most important financial statements for any business, and provides a detailed picture of what happened to a business’s cash over a particular period of time.

Use this trial balance template to check your credit and debit balances at the end of a given accounting period, and to support your financial statements. The template shows ending balances for specific accounts, as well as total amounts for the activity period and the overall difference. This is a simple worksheet that you can customize to reflect your business type and the products or services it offers. Cash flow projection templates can cover a variety of time frames, including the quarterly format offered here. Quarterly projections are useful for new businesses and those wanting to align cash flow projections with upcoming goals and business activities.

With this balance sheet template, you can assess the financial standing of a business by examining assets, liabilities, and equity. Business owners can use it to evaluate performance and communicate with investors. This template accounts receivable template lists customers, invoice tracking details, amounts due, and outstanding balances. Keeping track of these accounts can inform your collections process by helping you quickly identify which overdue payments have aged significantly. Negative cash flow should not automatically raise a red flag without further analysis. Poor cash flow is sometimes the result of a company’s decision to expand its business at a certain point in time, which would be a good thing for the future.

  • Use this trial balance template to check your credit and debit balances at the end of a given accounting period, and to support your financial statements.
  • A cash flow statement tells you how much cash you have on hand and what’s causing cash to flow in and out of your business for a time period.
  • The change in net cash for the period is equal to the sum of cash flows from operating, investing, and financing activities.
  • You can use the indirect method to create the statement of cash flows from the information in the balance sheet and income statement.

The term “cash” refers to both income and expenditures and may include investments and assets that you can easily convert to cash. The statement of cash flows acts as a bridge between the income statement and balance sheet by how money has moved in and out of the business. A cash flow statement – which is also called a statement of cash flows – is used alongside a company balance sheet and income statement to review the financial performance of a business.

Cash Flow Statement Template

As such, they can use the statement to make better, more informed decisions about their investments. In order to set yourself up for success, it’s imperative to be realistic when forecasting cash flows. You can build your projections on a foundation of key assumptions about the monthly flow of cash to and from your business. For instance, knowing when your business will receive payments and when payments are due to outside vendors allows you to make more accurate assumptions about your final funds during an operating cycle. It’s also wise to limit your forecast to a 12-month period for greater accuracy (and to save time). On a monthly basis, you can add another month to create a rolling, long-term projection.

Well, as mentioned above, a cash flow statement is one of the three essential financial statements for any business. An income statement and balance sheet are both very important, but neither specifically summarizes how cash flows in and out of your business. A cash flow statement does, and that gives you important information about the financial health of your business that might otherwise go unseen.

You can modify the template by adding or removing sections to tailor it to your business. This cash flow statement template provides you with a foundation to record operating, investing, and financing cash flows annually. The CFS is distinct from the income statement and the balance sheet because it does not include the amount of future incoming and outgoing cash that has been recorded as revenues and expenses. Therefore, cash is not the same as net income, which includes cash sales as well as sales made on credit on the income statements.

After that, you must subtotal each category to determine each one’s net cash inflows or outflows. Even if you use an Excel template, you can import it into monday.com for easier customization and collaboration. The statement will look the same every time, so everyone in your organization can learn what your statements look like. The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done.

Pay and get paid with fast international transfers all over the world, while cutting your bank costs and boosting your profits. Here are a few more reasons to start using a template to document your cash flow. By studying the CFS, an investor can get a clear picture of how much cash a company generates and gain a solid understanding of the financial well-being of a company. We accept payments via credit card, wire transfer, Western Union, and (when available) bank loan.

  • Cash flow from operations are calculated using either the direct or indirect method.
  • You can customize the list of cash inflows and outflows to match your company’s operations.
  • As an accountant prepares the CFS using the indirect method, they can identify increases and decreases in the balance sheet that are the result of non-cash transactions.
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  • The financing activities section shows a total of $16.3 billion was spent on activities related to debt and equity financing.
  • They may only need a high-level view of their cash flows, and a simple, neat template like this one would serve their needs without overcomplicating things.

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This template provides a clear outline of revenue and expenses along with net income figures. You can edit the template to match your needs by adding or removing detail, and create an income statement for a large or small business. A balance sheet provides a summary of financial health in a single, brief report.

The cash flow statement (CFS), is a financial statement that summarizes the movement of cash and cash equivalents (CCE) that come in and go out of a company. The CFS measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. As one of the three main financial statements, the CFS complements the balance sheet and the income statement. In this article, we’ll show you how the CFS is structured and how you can use it when analyzing a company. The Cash Flow Statement, or Statement of Cash Flows, summarizes a company’s inflow and outflow of cash, meaning where a business’s money came from (cash receipts) and where it went (cash paid).

What is a cash flow statement template?

This causes a disconnect between net income and actual cash flow because not all transactions in net income on the income statement involve actual cash items. Therefore, certain items must be reevaluated when calculating cash flow from operations. Some of the most common and consistent adjustments include depreciation and amortization. Business owners, managers, and company stakeholders use cash flow statements to better understand their companies’ value and overall health and guide financial decision-making.

cash flow form

It details the subcategories of cash flows within operating, investing, and financing activities. More specifically, for businesses, a cash flow statement tells you a lot about how a company’s operations are running and how financially healthy it is. Use this statement of cash flows template to track and assess cash flows over a three-year period.

Using a template is essential to helping you get started managing your organization’s financials quickly. But, creating and managing your cash flow statement may require multiple stakeholders to weigh in and make updates. That’s why it’s important to find a template with more advanced functionality like notifications and reminders and enhanced collaboration features to ensure everyone is kept in the loop. A cash flow analysis is not the same as the business budget or profit and loss projection which are based on the Income Statement. However, for a small uncomplicated business operating mainly with cash instead of credit accounts, there may seem to be little difference. As for the balance sheet, the net cash flow reported on the CFS should equal the net change in the various line items reported on the balance sheet.

To help visualize each section of the cash flow statement, here’s an example of a fictional company generated using the indirect method. Below you’ll find a collection of easy-to-use Excel templates for accounting and cash flow management, all of which are fully customizable and can be downloaded for free. The spreadsheet contains two worksheets for year-to-year and month-to-month cash flow analysis or cash flow projections. From this CFS, we can see that the net cash flow for the 2017 fiscal year was $1,522,000. The bulk of the positive cash flow stems from cash earned from operations, which is a good sign for investors. It means that core operations are generating business and that there is enough money to buy new inventory.

More free online templates for businesses.

If there is an amount that is still owed, then any differences will have to be added to net earnings. These figures can also be calculated by using the beginning and ending balances of a variety of asset and liability accounts and examining the net decrease or increase in the accounts. All applicants must be at least 18 years of age, proficient in English, and committed to learning and engaging with fellow participants throughout the program. Are you interested in gaining a toolkit for making smarter financial decisions and the confidence to clearly communicate them to key stakeholders? Explore Financial Accounting—one of three courses comprising our Credential of Readiness (CORe) program—to discover how you can unlock critical insights into your organization’s performance and potential. Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018.

cash flow form

Like all of monday.com’s financial templates, the startup budget template offers full customization, letting you pick and arrange your budgetary categories as you see fit. Plus, a cash flow statement template will make this financial statement accurate and professional each time. Using a consistent template also makes it easier to identify mistakes when they occur. Easily create reports to roll up annual, quarterly, or monthly cash flow details so you’ll always have a real-time view of the financial health of your business.

Use the template to create projections and then compare the variance between estimated and actual cash flows. Use this template to create a cash flow forecast that allows you to compare projections with actual outcomes. This template is designed for easy planning, with a simple spreadsheet layout and alternating colors to highlight rows.

You get a snapshot of cash flows over a 12-month period in a basic Excel template. Cash and cash equivalents are consolidated into a single line item on a company’s balance sheet. It reports the value of a business’s assets that are currently cash or can be converted into cash within a short period of time, commonly 90 days.

Most companies prefer the indirect method because it’s faster and closely linked to the balance sheet. However, both methods are accepted by Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). A cash flow statement is a financial report that details how cash entered and left a business during a reporting period.

Potential investors are exceedingly likely to want to see a cash flow analysis to determine whether your business is standing on sound financial footing before handing you a bag of money. Given the number of businesses that fail each year due to poor cash flow management, savvy investors (i.e. the ones with lots of money) tend to want a cash flow statement before deciding whether to invest. Cash flow statements have three main sections, cash from operating activities, investing activities, and financing activities. On monday.com, you can arrange your pro forma template for all financial statements in whatever way best fits your needs.

A cash flow template is a prestructured document that helps you create a “statement of cash flows,” also called the cash flow statement. It’s one of the four key financial statements and details how much cash came into and went out of your business over a specific period of time. The cash flow statement paints a picture as to how a company’s operations are running, where its money comes from, and how money is being spent. Also known as the statement of cash flows, the CFS helps its creditors determine how much cash is available (referred to as liquidity) for the company to fund its operating expenses and pay down its debts. The CFS is equally important to investors because it tells them whether a company is on solid financial ground.

With formulas, you can quickly calculate various financial ratios to analyze future performance in specific situations. Plus, it’s easy to generate different versions of the same pro forma statement, helping you compare different scenarios side-by-side. A business might use this simplified cash flow statement template to create one on the fly to highlight some numbers in-house. They may only need a high-level view of their cash flows, and a simple, neat template like this one would serve their needs without overcomplicating things.

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