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 liquidity, solvency, and financial health. A simple cash flow statement template can be used to create a basic cash flow statement for any business.
There are three main types of cash flow activities: operating, investing, and financing. Operating activities include the cash generated from a company’s core business operations. Investing activities include the cash used to purchase or sell assets. Financing activities include the cash raised or used to repay debt or equity.
To create a simple cash flow statement, you will need to gather the following information: Beginning cash balance, ending cash balance, net income, depreciation and amortization, changes in working capital, capital expenditures, and debt issuance. Once you have gathered this information, you can use the following template to create your cash flow statement:
Operating Activities
The operating activities section of the cash flow statement shows the cash generated from a company’s core business operations. This section includes the following items:
Net income: This is the profit or loss from a company’s core business operations. Depreciation and amortization: This is the non-cash expense that represents the decrease in the value of a company’s assets over time. Changes in working capital: This is the change in a company’s current assets and liabilities. Capital expenditures: This is the cash used to purchase or sell assets.
Investing Activities
The investing activities section of the cash flow statement shows the cash used to purchase or sell assets. This section includes the following items:
Purchase of property, plant, and equipment: This is the cash used to purchase or sell property, plant, and equipment. Purchase of investments: This is the cash used to purchase or sell investments. Sale of property, plant, and equipment: This is the cash received from the sale of property, plant, and equipment. Sale of investments: This is the cash received from the sale of investments.
Financing Activities
The financing activities section of the cash flow statement shows the cash raised or used to repay debt or equity. This section includes the following items:
Issuance of debt: This is the cash received from the issuance of debt. Repayment of debt: This is the cash used to repay debt. Issuance of equity: This is the cash received from the issuance of equity. Repurchase of equity: This is the cash used to repurchase equity.
Conclusion
A simple cash flow statement template can be used to create a basic cash flow statement for any business. This statement can be used to assess a company’s liquidity, solvency, and financial health. By understanding the different sections of the cash flow statement, you can gain a better understanding of a company’s financial performance.
If you need help creating a cash flow statement, there are many resources available online. You can also consult with a financial advisor to get help with this process.
