Cashflow Statement Template

PART IX
Cash Flow Statement

The Cashflow statement, unlike the Income Statement or Balance Sheet, deals only with cash related items. Non-cash items such as depreciation, accounts receivables or accounts payable, are not included as part of this particular analysis. Every entry has to do with the actual flow of CASH. 

cash flow statement

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You either possess cash or you do not. In partnership with the Balance Sheet and Income Statement, the Cashflow Statement rounds out the majority of what are commonly referred to the 'business financials'.

Cashflow analysis is used more than ever as the business world started being scrutinized for padding profits on paper. This particular statement has only been required as part of a complete business plan since approximately 1988.

Today every organization wanting to file reports with the SEC (Securities and Exchange Commission) is obligated to provide a quarterly and annual statement of cash flow. 

Many of the items on the cashflow statement are also included as part of the balance sheet and income statement. However, a key difference is that this statement is uniquely configured to highlight cash generated items only; items that generate either cash inflows or cash outflows.

"Never take your eyes off the cash flow because it's the life blood of business."

- Richard Branson

The cash flow of your business will tell an important story to business leaders, and potential lenders or investors. It is very difficult to manipulate a company’s cash activity. Cash is either flowing in or flowing out. Cash on hand, means that is the exact amount of money currently in the bank and available to spend today.

Assuming no outright fraudulent activity is involved, the cashflow statement tells precisely where the cash has come from and who received it. Cash is king. The more cash you have available, the more opportunities you can take advantage of; the more freedom you have to change and grow your business; the more you can spend on research and innovation; the more you can contribute to your community. 

Cashflow Statement Template

To get you started in preparing a cashflow statement for your business plan, use our free Cash Flow Template

Any good cashflow template lists items such as the cash generated from operations; cash used for investments; cash gained from proceeds of sale of assets; cash paid or received from either the issuance of notes or the payment of notes.

Potential investors will zero in on the organization’s current cash position and the trends associated with the balance of cash on hand.

Read the cashflow statement in the following order:

  • Beginning Cash Balance = enter the starting point for cash. This may represent your total cash startup investment. 
  • (plus) Cash Inflows (Income) = inflows include things like the collection of accounts receivables and receipts from sales. 
  • (equals) Available Cash Balance 
  • (minus) Cash Outflows (Expenses) = outflow include expenses such as advertising, bank fees, payroll, taxes, rent and other. 
  • (equals) Ending Cash Balance 

Utilize our free business financial templates for the cashflow statement, income statement and balance sheet to keep your business on track and to prepare a comprehensive business plan. 

"Entrepreneurs believe that profit is what matters most in a new enterprise. But profit is secondary. Cash flow matters most."

- Peter Drucker

Success Lesson #20

Health Over Cash

If you are aiming for high achievement you must maintain your health and a strong physical condition. Always be ready for life’s great challenges that will continually place every go-getter in a position that will force them to utilize their reserve energies.

An inexperienced leader or businessperson might say, “What is the use of depriving myself, during all these months, of even the slightest pleasure? What is the good of going to bed early for maximum sleep or exercising routinely?”

The fact is that once these fitness habits are instilled, they turn from becoming a burden you must endure to a gift that you give yourself regularly. You give yourself sharpness of the mind and you add decades to your life.  

"Cultivate only the habits that you are willing to let master you.”

- Elbert Hubbard

Think of all the glorious memories you will get to witness with the added years you gift yourself through good physical fitness. More importantly, realize the additional years you will be able to function wholly without the help of contraptions or healthcare workers.

Wouldn’t you rather take regular walks now on your own, than have to be wheeled somewhere for years because of the atrophy of the limbs caused by laziness and under-utilization?

True business success depends on your ability to instill balance in your life. Make choices now to remain healthy and keep open the doors to maximum opportunity and achievement.

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› Part IX: Cashflow Statement

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