A sources and uses statement template is a financial statement that summarizes the sources and uses of funds over a period of time. It is used to track the flow of money in and out of a company and to identify trends in the company’s financial performance. Sources and uses statements are often used by investors and creditors to assess a company’s financial health and to make investment decisions.
The sources and uses statement is divided into two sections: sources of funds and uses of funds. The sources of funds section lists the sources of the company’s cash inflows, such as operating activities, investing activities, and financing activities. The uses of funds section lists the uses of the company’s cash outflows, such as capital expenditures, acquisitions, and dividends.
Sources of Funds
**Operating activities** are the primary source of funds for most companies. Operating activities include the sale of goods or services, as well as other activities that generate revenue. Cash flow from operating activities is calculated by subtracting operating expenses from revenue.
**Investing activities** are activities that involve the acquisition or sale of assets. Investing activities can include the purchase of property, plant, and equipment, as well as the sale of investments. Cash flow from investing activities is calculated by subtracting the proceeds from the sale of assets from the cost of acquiring new assets.
**Financing activities** are activities that involve the raising or repayment of debt or equity. Financing activities can include the issuance of new shares of stock, the repayment of debt, and the payment of dividends. Cash flow from financing activities is calculated by subtracting the proceeds from the issuance of new shares of stock from the repayment of debt and the payment of dividends.
Uses of Funds
**Capital expenditures** are investments in property, plant, and equipment. Capital expenditures are made to increase the company’s productive capacity or to improve its efficiency. Cash flow from capital expenditures is calculated by subtracting the cost of new property, plant, and equipment from the proceeds from the sale of old property, plant, and equipment.
**Acquisitions** are the purchase of other companies. Acquisitions can be used to expand the company’s product line, enter new markets, or gain access to new technologies. Cash flow from acquisitions is calculated by subtracting the purchase price of the acquired company from the proceeds from the sale of any assets acquired in the acquisition.
**Dividends** are payments made to shareholders. Dividends are a way for companies to distribute their earnings to shareholders. Cash flow from dividends is calculated by subtracting the amount of dividends paid from the amount of dividends received.
Conclusion
Sources and uses statements are a valuable tool for understanding a company’s financial performance. They can be used to identify trends in the company’s cash flow, to assess the company’s financial health, and to make investment decisions.
Sources and uses statement templates are available online. These templates can be used to create a sources and uses statement for any company. When creating a sources and uses statement, it is important to be accurate and to include all of the relevant information.
