A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. It is used to assess a company’s ability to generate cash, to make investments, and to pay off debt. A blank cash flow statement template can be used to create a cash flow statement for any company.
There are three main types of cash flow activities: operating activities, investing activities, and financing activities. Operating activities include the cash generated from the company’s core business operations, such as sales of goods or services. Investing activities include the cash used to purchase or sell long-term assets, such as property, plant, and equipment. Financing activities include the cash used to raise capital, such as issuing stock or taking out loans.
The Indirect Method
The indirect method of preparing a cash flow statement starts with the company’s net income and adds back non-cash expenses, such as depreciation and amortization. It then subtracts any gains or adds back any losses from the sale of assets. Finally, it adjusts for changes in working capital, such as accounts receivable, accounts payable, and inventory.
The indirect method is the more common method of preparing a cash flow statement. It is relatively easy to prepare and can be used to compare a company’s cash flow performance to other companies in the same industry.
The indirect method can be used to create a blank cash flow statement template. The template will include a section for each of the three main types of cash flow activities. The user will need to enter the appropriate data for each section in order to create a complete cash flow statement.
The Direct Method
The direct method of preparing a cash flow statement starts with the company’s cash balance at the beginning of the period. It then adds the cash received from operating activities, investing activities, and financing activities. It then subtracts the cash paid out for operating activities, investing activities, and financing activities. Finally, it adds or subtracts any changes in cash balance during the period.
The direct method is a more detailed method of preparing a cash flow statement. It provides more information about the company’s cash flows than the indirect method. However, it is also more difficult to prepare.
The direct method can be used to create a blank cash flow statement template. The template will include a section for each of the three main types of cash flow activities. The user will need to enter the appropriate data for each section in order to create a complete cash flow statement.
Conclusion
A cash flow statement is an important financial statement that can be used to assess a company’s financial health. A blank cash flow statement template can be used to create a cash flow statement for any company. The two main methods of preparing a cash flow statement are the indirect method and the direct method. The indirect method is more common and easier to prepare, while the direct method is more detailed and provides more information.
Regardless of which method is used, a cash flow statement can be a valuable tool for understanding a company’s financial performance.
