Cash Flow Statement Template for Excel Free Download

The starting cash balance is necessary when leveraging the indirect method of calculating cash flow from operating activities. Cash flow statements are powerful financial reports, so long as they’re used in tandem with income statements and balance sheets. Meaning, even though our business earned $60,000 in October (as reported on our income statement), we only actually received $40,000 in cash from operating activities. Increase in Accounts Receivable is recorded as a $20,000 growth in accounts receivable on the income statement. That’s money we’ve charged clients—but we haven’t actually been paid yet. Even though the money we’ve charged is an asset, it isn’t cold hard cash.

What is Cash Flow?

• EBITDA stands for earnings before interest, taxes, depreciation, and amortization.
• It considers all the cash the company has collected during the period for the sale of goods and services.
• With BILL’s cash flow forecasting tool, you’ll be able to predict future cash flows for more precise and informed decision-making.
• Free cash flow helps assess your ability to repay debt or pay dividends.

Cash flow might also impact internal decisions, such as budgeting, or the decision to hire (or fire) employees. The direct method adds up all of the cash payments and receipts, including cash paid to suppliers, cash receipts from customers, and cash paid out in salaries. This method of CFS is easier for very small businesses that use the cash basis accounting method.

Example of a Cash Flow Statement

• If the net amount is a negative amount, it is referred to as a net loss.
• This term refers to the cash generated from a business’s investments.
• The financing activities section generally shows inflows and outflows to or from investors and lenders.
• For example, if you have a $25,000 line of credit, and you have taken out $10,000, you would pay interest only on the $10,000.
• In such a case, money outflow results from the purchase of property, plant, equipment (PPE), and other investment instruments.
• During the reporting period, operating activities generated a total of $53.7 billion.

We focus on financial statement reporting and do not discuss how that differs from income tax reporting. Therefore, you should always consult with accounting and tax professionals for assistance with your specific circumstances. To illustrate, assume a company sells one of its delivery trucks for $3,000. The truck is in the accounting records at its original cost of $20,000. Combining the $20,000 and the $18,000 results in a book value (or carrying value) of $2,000. Next, we examine cash flow how depreciation expense is reported on the Good Deal Co.’s financial statement.

Step 2: Determine the capital expenditures

A company’s 3 main financial statements are the cash flow statement, the balance sheet, and the income statement. Each document provides a different perspective on the company’s financial positioning and business performance, so it’s a good idea to look at each to get a more complete picture of how the company is doing. A balance sheet provides a snapshot of a company’s financial position at a specific point in time, detailing assets, liabilities, and shareholders’ equity. In contrast, a cash flow statement focuses specifically on the movement of cash within an organization over a reporting period, categorizing cash activities into operating, investing, and financing activities. After calculating cash flows from operating activities, you need to calculate cash flows from investing activities. This section of the cash flow statement details cash flows related to the buying and selling of long-term assets like property, facilities, and equipment.

Track Costs and More on Dashboards, Reports and Timesheets

With a well-organized cash flow template, decision-making becomes more strategic, as it offers insights into spending patterns and potential investment opportunities. A cash flow template is vital for tracking and managing financial liquidity, ensuring stability and making informed financial decisions. By providing a structured overview of cash inflows and outflows, it helps businesses and individuals maintain a clear understanding of their financial position. It includes cash from core business activities that involve the sale or production of your goods or services. Examples include customer payments, payroll, and inventory purchases.

• Some candidates may qualify for scholarships or financial aid, which will be credited against the Program Fee once eligibility is determined.
• Businesses with strong cash flow can negotiate better terms strategically.
• If Good Deal Co. was renting a storage space for $50 per month, each month’s income statement would also list rent expense of $50.
• They might also be interested in monitoring how free cash flow has fluctuated over the years, showing how well they’re controlling working capital and optimizing operating expenses.
• In finance, the term is used to describe the amount of cash (currency) that is generated or consumed in a given time period.

Using a cash flow statement template

Note that the 3-month year-to-date net income of $300 causes the amount in the owner’s capital account (on the following balance sheet) to increase from $2,000 to $2,300. The receipt of $800 caused the cash to increase from $1,300 to $2,100 and accounts receivable to decrease to zero. The SCF for the two months of January 1 through February 29, begins with the accrual accounting net income of $300. Since this is not the amount of cash from operating activities, the net income must be adjusted to the net amount of cash from operating activities. If an adjustment to the amount of net income is in parentheses, it is subtracted from net income. It indicates that the cash amount was less than the related amount on the income statement.

• These values show the company’s available cash at the start and end of the reporting period, ensuring transparency in cash management.
• Discover top tips for choosing the right expense tracking software for your small business.
• Download this free budget dashboard template for Excel to view financial data, providing an at-a-glance view of income, expenses and overall financial performance.
• This includes any dividends, payments for stock repurchases, and repayment of debt principal (loans) that are made by the company.
• Keep in mind that this section only includes investing activities involving free cash, not debt.
• The inventory of a manufacturer should report the cost of its raw materials, work-in-process, and finished goods.
• Think of cash flow as a picture of your business checking account over time.

If your business doesn’t have many fixed assets, the investing section will be minimal. Businesses with loans or shareholders will have some activity in their financing section. Financing cash flow is the money you pay or receive from lenders, investors, or other creditors. To find your cash flow value, subtract the outflow total from step 3 from the total cash balance from steps 1 and 2.

Alternatively, companies can improve FCF by optimizing working capital, like better controlling inventory, receivables, and payables. This means a quicker collection of the cash they’re owed, turning more unsold inventory into sales, and securing favorable terms on short-term obligations. However, it has some key differences between another common profit metric — net income.

Conclusion: stable cash flow for more security and independence

As you can see from this cash flow statement template, while the business had a net income of $75,000, the cash available in the business that month was $31,000. With this information, the business owner knows that they’ve only got $31,000 to cover payroll, pay their taxes and invest in the business at this point in time. Additionally, maintaining a positive cash flow becomes easier, as the template helps prevent overspending and ensures there are sufficient cash reserves for ongoing operations. It also simplifies financial reporting by providing a clear structure for tracking and analyzing cash movements over time.

For Investors: Business Valuation 101

This final number will also be the opening balance for your next month or operating period. This term refers to the cash generated from normal business operations, including money taken in from sales and money spent on goods like materials and inventory. For smaller businesses, positive cash flow can demonstrate business health. Positive cash flow ensures that a business can pay regular expenses, reinvest in inventory and have more stability in case of hard times or off-seasons. A gain is measured by the proceeds from the sale minus the amount shown on the company’s books. Since the gain is outside of the main activity of a business, it is reported as a nonoperating or other revenue on the company’s income statement.