Cash Flow Templates in Excel

Cash flow statements help small business owners identify liquidity, the strengths and weakness in terms of the cash flowing in and out of accounts. Here’s how you can prepare the statement and analyze the results.

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What’s a Cash Flow Statement?

A cash flow statement (CFS), or a statement of cash flows, is a financial document that lists the cash funds that move in and out of a company’s accounts. The basic formula is simple: cash in minus cash out. Find out what this equation reveals about your small business by visiting SmartBiz University, where we’ve covered all the key steps to analyzing cash flow.

Specifically, the document demonstrates how well a business can maintain the balance between revenue and expenses. You’ll typically find the CFS in the company’s financial reports, in conjunction with the balance sheet and income statement.

Why it Matters

The CFS gives lenders a view of where your cash is coming from and how you’re using it to grow your small business. They can also see how much available cash, or liquidity, your company has when it comes to paying debt and funding business operations.

What sets the CFS apart from the income statement and balance sheet is that it only incorporates the business’s current cash inflows and outflows, not those coming up in the future through credit or other noncash items.

Applying for an SBA loan through SmartBiz? To qualify, you’ll need to demonstrate sufficient business and personal cash flow to service all debt payments, including the new SBA loan payment, backed by 3 years of tax returns and interim financial data. That’s where cash flow statements come into play.

 

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Elements of a Cash Flow Statement

Here are the three main sections that make up a cash flow statement.

Cash from operating activities

Under this heading, you’ll find day-to-day revenue and expenses. Some common items include receipts from sales transactions, interest payments, and salary payments. The net cash flow from operations is an overview of your business’s current assets and liabilities (from your balance sheet), and its revenues and expenses (from the income statement).

Cash from investing activities

Activities that might fall under this category are buying and selling assets, collecting payments on loans, or making other changes to your business’s equipment, assets, and investments.

Cash from financing activities

This section refers to borrowing from creditors or shareholders, repaying loans, selling and repurchasing company stock, and paying dividends.

Cash Flow Analysis

By comparing several cash flow statements over several months or years, you can perform a cash flow analysis. This financial management strategy will help you estimate future cash flows and prepare a budget. When it comes to a busy season, performing a cash flow analysis in advance can help you find a balance between revenue and expenses to get the timing just right.

Cash Flow Templates

Looking for some quick templates for your cash flow statement? The Small Business Administration and SCORE have both provided some great resources that you can use to forecast your small business growth, complete with instructions and Excel formulas to help you create your very own CFS.

 

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