Statement of Cash Flows

Cash flows are an integral part to every business, determining the liquidity and profitability of the business. A statement of cash flows is a financial statement that states the change to balance sheet accounts in terms of cash inflow and outflow, and breaks down the cash flow in terms of operating, investing and financing activities. The cash flow statement is a necessary tool for any business owner managing the performance and profitability of their business, prospective investors analyzing potential investment choices, or even employees that want to determine the health of a company.

How to Use the Statement of Cash Flows Excel Document

• First, download the free and customizable statement of cash flows template from the website and save it. It is important to save it for the period and business for which the statement of cash flows is being done to avoid confusion with other files.
• Second, fill in the cash flow information regarding cash flows from operating, investing, and financing activities in their respective fields in the Excel document.
• Third, enter the cash balance at the beginning of the period so the template can calculate the cash flow and show the current cash balance. The current cash balance should then be shown as cash balance at the end of the period.

Tips for Using the Statement of Cash Flows Excel Document

• First, make sure that the inflows and outflows are correct. Inflows are positive and should be shown as regular black text, while outflows are negative and should be shown in red text with parentheses around them. It is important to have the correct inflows and outflows so that the template yields the correct final cash balance.
• Second, always double check the numbers. Even small errors when entering the information into the template can affect the results, which is why it is necessary to make sure that the information being entered is accurate.
• Third, analyze the results. The cash flow statement is useful for more than just calculating the cash balance at the end of the period. It can also be used as a tool to see where the company is spending most of its cash and trying to plan ahead to make sure the business has enough cash to pay off short-term debt obligations.

Statement of cash flow can be a powerful tool to analyzing any company, although it can be confusing at first. The statement of cash flows Excel template can make this valuable tool much more accessible and convenient to use.

Download: Statement of Cash Flows Template