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How to Write a Cash Flow Statement
A cash flow statement is one of a business' main financial statements, along with the balance sheet and income statement. It focuses on the sources and uses of cash through operating, investing and financing activities. Activities that result in the receipt of cash are cash inflows, and activities that result from the spending of cash are cash outflows.
A cash flow statement is divided into three sections:
- Cash flow from operating activities - cash inflows and outflows resulting from day-to-day business operations, including the collection of cash from sales and payment of expenses.
- Cash flow from investing activities - result from the purchase or sale of the business's non-current assets, that is, assets owned for longer than 12 months.
- Cash flow from financing activities - any financing activity that changes the size and composition of the business' long-term financing structure. This includes repayments of the principal on the business mortgage or capital contributions the business owner has made to the business.
You can prepare a Cash Flow Statement for your business by following the strucure below:
| (Your business name) | |
| Statement of Cash Flows | |
| For the year ended __ / __ / ____ | |
| $ | |
| Cash flow from operating activities | |
| Receipts from customers | 0 |
| Payments to suppliers | - 0 |
| Payments to employees | - 0 |
| Interest payments | - 0 |
| Interest received | 0 |
| Taxes paid | - 0 |
| Net cash flow from operating activities | Total of above figures |
| Cash flow from investing activities | |
| Purchases of equipment | - 0 |
| Purchases of property | - 0 |
| Proceeds from sale of equipment | 0 |
| Proceeds from sale of property | 0 |
| Net cash flow from investing activities | Total of above figures |
| Cash flow from financing activities | |
| Proceeds from borrowings | 0 |
| Payments of borrowings (repayment of principal) | - 0 |
| Investment into business | 0 |
| Drawings from business investment | - 0 |
| Net cash flow from financing activities | Total of above figures |
| Net increase (decrease) in cash held | Total of above 3 total figures |
| Cash at beginning of period | 0 |
| Cash at end of period | Net increase cash at beginning |
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To assist you in developing your cash flow statements, you can download the following sample templates:
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