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Cash Flow Statement Template

Explain why cash went up or down over a period, starting from net income. Operating, investing and financing sections total automatically, and ending cash can be checked against your books.

Details

Cash flows

Enter money coming in as positive and money going out as negative.

Operating activities

Start from net income, add back non-cash expenses, and adjust for changes in receivables, payables and inventory.

Net cash from operating activities$0.00

Investing activities

Purchases of equipment are negative, proceeds from selling assets are positive.

Net cash from investing activities$0.00

Financing activities

Loan proceeds and owner contributions are positive; repayments and draws are negative.

Net cash from financing activities$0.00

How it works

  1. 1

    Start from net income

    Take it from the profit and loss statement for the same period.

  2. 2

    Adjust and add flows

    Add back non-cash expenses, adjust for working capital, then record equipment purchases, loans and owner draws.

  3. 3

    Check ending cash

    Beginning cash plus the net change should equal the cash on your balance sheet.

The three sections

  • Operating activities: net income, plus non-cash expenses such as depreciation, plus or minus changes in receivables, inventory, prepaid expenses, payables and accrued liabilities.
  • Investing activities: buying equipment, vehicles or property (negative) and selling them (positive).
  • Financing activities: borrowing (positive), repaying loan principal (negative), owner contributions (positive) and draws or distributions (negative).

Getting the working-capital changes

Compare two balance sheets, one at the start and one at the end of the period. For each current asset other than cash, an increase uses cash (negative) and a decrease frees cash (positive). For each current liability, an increase provides cash (positive) and a decrease uses it (negative).

The check that matters

Beginning cash plus the net change must equal ending cash on the balance sheet. Enter your books' ending cash and the template tells you whether the statement ties out, and by how much it doesn't.

Frequently asked questions

Why can profit and cash be so different?

Profit counts sales when they're earned and expenses when they're incurred. Cash moves when customers actually pay, when you pay suppliers, when you buy equipment or repay a loan. The cash flow statement bridges the two.

What sign do I use for an increase in receivables?

Negative. When receivables grow, you recorded income you haven't collected yet, so cash is lower than profit. A decrease in receivables is positive. Payables work the other way: an increase is positive.

Where do loan payments go?

The principal part is financing (negative). The interest part is already in net income as an expense, so it isn't entered again.

What is the indirect method?

It starts from net income and adjusts it to cash, which is how most small business statements are prepared. The direct method lists cash received from customers and paid to suppliers instead; both give the same total.

My ending cash doesn't match the books. Why?

Usually a balance sheet change that wasn't included: a new loan, a credit card paid down, a change in inventory, or owner contributions and draws.

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