Cash Flow Statement

Premium Feature: This is a premium feature and may not be available on all plans. To access this feature, please upgrade to a supporting plan.
 

 

About the Cash Flow Statement


The Cash Flow Statement is one of the top financial reports used by business owners, along with the Balance Sheet and Income Statement reports. There are two types of reporting methods for the Cash Flow Statement: a direct method and an indirect method. WorkingPoint uses the indirect method.

Your Cash Flow Statement helps you analyze the affects of your Balance Sheet and Income Statement activity on your cash and breaking your spending out into 3 main categories: Operations, Financing, and Investing. Since your Balance Sheet and Income Statement are accrual-basis reports, you don't actually see how your cash is being affected by your activities because these reports include all transactions. The Cash Flow Statement takes the Balance Sheet and Income Statement and converts them into a single cash-basis report so you can see how you cash is being used.

Use the Cash Flow Statement report to:

  • See where your cash is going and coming from
  • Compare Net Income to Net Cash from Operating Expenses to measure quality of earnings
  • Provide creditors with necessary financial reports
  • Show investors how your cash is being used

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Viewing Your Cash Flow Statement


To view your Cash Flow Statement:

  1. Click the Reports tab.

  2. Under Financial Reports, click Cash Flow Statement.

  1. From the Date Range drop-down menu, choose the date range you want to see or create your own custom range by entering "From" and "To" dates and clicking "Refresh List." More about dates

  2. From the Report Format drop down menu, choose the report output option.

  • To view the report on screen, select On Screen Display

  • To print the report, select PDF

  • To export the report to Microsoft® Excel, select Excel (XLS) Detail

  • To export the report to Open Office, select Open Office (XML) Detail

  • To export the report to a comma separated file, select Comma Separated (CSV)

  1. Click Run Report.

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Reading the Cash Flow Statement


WorkingPoint uses the indirect method for reporting cash flow. The Cash Flow Statement is divided into three major categories: Operating, Investing and Financing Activities. 

Section

Description

Accounts Involved

Operating Activities

Operations activities include your day-to-day business transactions used to produce and sell your goods and services.

*Depreciation Expenses are added back to your Net Income as an adjustment. Since Depreciation is a non-cash event, this adjustment reverses the expense brought in via Net Income.

Depreciation Expense* Accounts Receivable
Accounts Payable
Credit Card Liability
Other Current Liability
Inventory
Other Current Assets

Investing Activities

Investing activities include changes in cash brought in from or paid out for long-term assets, like property, plant, and equipment; other investments, like stock purchases; and loans to others and receiving the payments on loans.

Fixed Assets
Other Assets

Financing Activities

 

Financing activities includes changes in cash used to purchase or issue company stock or repayments of loans.

Long-term Liability
Equity

Net Change in Cash

This is the total change in your cash for all activities during the given period.

How it is figured:

Cash Flow from Operating Activities + Cash Flow from Investing Activities + Cash Flow from Financing Activities = Net Change in Cash

 


How can you use the Cash Flow Statement?


You can use this report to:

  • Compare cash from operating activities to net income.

If your cash from operating activities is higher than your net income, then your income is "high quality"; if it is lower, then you should look to see why you are not converting net income into cash.

  • Examine your financing and investing activities to see how you are choosing to spend your money.

  • Provide potential lenders the necessary report so they can determine if you have the potential to pay back your loans.

  • Show potential investors how you use your cash.

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About dates in the Cash Flow Statement


To-date means the beginning of that period to the equivalent of today's date in that period.
 

Date range:

What it shows:

Example (assuming today’s date is August 6 and fiscal year starts January 1)

This Month-to-date

From the first day of the current month through today

August 1 - 6, 2008

This Quarter-to-date

From the first day of the current quarter through today

July 1 - August 6, 2008

This Fiscal Year-to-date

From the first day of the current fiscal year through today

January 1 - August 6, 2008

Last Month

 

From the first day through the last day of last month

July 1 – July 31, 2008

Last Quarter  

From the first day through the last day of last quarter

April 1 – June 30, 2008

Last Quarter-to-date

From the first day of last quarter through three months ago today

April 1 - May 6, 2008

Last Fiscal Year

From the first day through the last day of last fiscal year

Jan 1 – December 31, 2007

Last Fiscal Year-to-date

From the first day of last fiscal year through one year ago today

Jan 1 - August 6, 2007

Custom

 

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