Sample Cash Flow Statement

Our sample cash flow statement template reflects all cash generated by a business entity during the period being measured. The period being reflected can be chosen by the company, although it is customary to prepare a cash flow statement for each quarter-end and year-end close. A cash flow statement is needed in addition to a company’s profit and loss statement to gain a clear understanding of its financial health. And, most lenders or creditors will want to review a business’s cash flow statement to review trends when considering a loan.

There are 4 primary categories that are reflected on a sample cash flow statement including:

Operating Activities- Items listed on the income statement using the accrual method are converted into cash. Typical items that will be reflected in this section are cash receipts, payroll and any other employee payments, supplier and vendor payments, rent or lease payments, utility payments and all tax payments. All items that are listed within this section are directly linked to the daily functioning of the business unit.

Investing Activities- Any purchases of long-term investment such as equipment, machinery, property and other fixtures are listed here. The purchase of stock and other securities is listed here. These investment expenses are considered to be capital expenditures and are not listed as expenses but as assets on the balance sheet.

Financing Activities- Any changes in stock or bond issuance or payment of company dividends will be accounted for here. Other information that can be included would be money from any loans or other debt instruments, cash received from issuing debt securities or stock from the business, return of capital and dividend payments.

Supplemental Information- Any significant business exchanges or agreements that did not involve cash will be listed here.

There are two primary methods for calculating this, the direct method and indirect method. Both methods will yield the same final result but the process used in determining that result is different.

It is important to distinguish that sample cash flow statements are not the same as depicting net profit or net cash flows for a business. Cash flow statement templates are useful for determining cash or revenue trends for a business. This information is commonly used when creating budgets and forecasts for following quarters and for making more accurate projections for coming years.

It is important to note that during some periods, a sample cash flow statement can be negative. This is not always a negative reflection of the company’s financial health. It could simply be a reflection of a growth strategy and an outlay of cash for a large investment during that particular time frame. A company’s cash flow statement is used in combination with the balance sheet and the profit and loss statement to determine what the overall financial health of a business is.

Use our free sample cash flow statement template.

Watch our free online accounting course here