A pro forma cash flow statement template is a financial document that is used to forecast a company’s future cash flows. This document is used by businesses to make informed decisions about their operations and to secure funding from investors.
Pro forma cash flow statements are typically prepared on a monthly or quarterly basis, and they include three main sections: operating activities, investing activities, and financing activities.
Operating Activities
The operating activities section of a pro forma cash flow statement shows the cash that is generated or used by a company’s operating activities. These activities include the sale of goods or services, the purchase of inventory, and the payment of wages and other expenses.
The operating activities section of a pro forma cash flow statement can be used to assess a company’s profitability and its ability to generate cash from its operations.
To prepare the operating activities section of a pro forma cash flow statement, you will need to collect data on the company’s sales, inventory, and expenses.
Once you have collected this data, you can use the following formula to calculate the company’s net operating cash flow:
$$Net Operating Cash Flow = Operating Income + Depreciation & Amortization – Change in Working Capital$$
Investing Activities
The investing activities section of a pro forma cash flow statement shows the cash that is used by a company to purchase or sell assets. These activities include the purchase of property, plant, and equipment, the sale of investments, and the issuance of new equity or debt.
The investing activities section of a pro forma cash flow statement can be used to assess a company’s ability to generate cash from its investments.
To prepare the investing activities section of a pro forma cash flow statement, you will need to collect data on the company’s purchases and sales of assets.
Once you have collected this data, you can use the following formula to calculate the company’s net investing cash flow:
$$Net Investing Cash Flow = Capital Expenditures – Proceeds from Sale of Assets$$
Financing Activities
The financing activities section of a pro forma cash flow statement shows the cash that is used by a company to finance its operations. These activities include the issuance of new equity or debt, the repayment of existing debt, and the payment of dividends.
The financing activities section of a pro forma cash flow statement can be used to assess a company’s ability to generate cash from its financing activities.
Conclusion
Pro forma cash flow statements are an important tool for businesses of all sizes. They can be used to make informed decisions about operations, to secure funding from investors, and to assess a company’s financial health.
If you are not sure how to prepare a pro forma cash flow statement, you should consult with an accountant or financial advisor.
