What Is a Cash Flow Statement?
A cash flow statement is a financial document that tracks a business's cash inflows and outflows during a specific period. It helps show changes in cash on hand, available balance, and cash equivalents.
Under US Generally Accepted Accounting Principles (GAAP),
section ASC 230 sets the rules for creating and presenting the statement of cash flows. It divides cash flow reporting into three sections: operating activities, investing activities, and financing activities.
Under U.S. GAAP, a statement of cash flows is an integral part of the financial statements required for applicable entities. Moreover, the
International Financial Reporting Standard (IFRS), IAS 7, also requires entities to present a statement of cash flows as an integral part of their financial statements. But not every business prepares its cash flow statement in the same format or with the same level of detail. It varies depending on the purposes for preparing financial statements and the business’s needs. Moreover, businesses also follow different accounting frameworks; some follow US GAAP while others follow IFRS, which can have different requirements. So make sure to check out the applicable accounting requirements before preparing one.
These templates are mainly designed for different reporting periods, such as monthly, yearly, multi-year, and quarterly. In addition, these templates can support planning, analysis, and recordkeeping while helping users evaluate liquidity, solvency, and financial flexibility. They can also help spot the exact cause of cash inflow and outflow trends, such as seasonal fluctuations, declining operating cash flow, rising capital expenditures, growing dependence on financing, etc.
Three Main Sections of a Cash Flow Statement
The templates in this collection are mainly divided into three main sections:
- Operating activities include cash inflows and outflows related to the business's primary revenue-producing activities. For instance, for cash inflows, it includes customer cash sales, collections from accounts receivable, service revenue, subscription income, etc. For cash outflows, it includes purchases of raw materials, manufacturing supplies, freight and shipping, rent or lease payments, and utilities, etc.
- Investing activities generally relate to the acquisition and disposal of long-term assets and investments. For example, the sale or purchase of property, equipment, vehicles, land, buildings, collection of principal on loans, and investment securities. It shows how a business is allocating money toward long-term growth, expansion, and asset management.
- Financing activities involve transactions that affect contributed equity and borrowings, such as stock issuance, capital contributions, investor funding, borrowings, loan repayments, and stock repurchases. Basically, it shows how the business raises capital and how it returns funds to lenders or owners.
What You Will Find in This Collection
As mentioned above, the collection mainly contains four cash flow statement templates designed around different reporting periods. While the reporting periods vary, the templates use similar cash flow categories and line items to help you track your business’s cash receipts, cash payments, and net cash flow. This allows you to review your business’s cash movements at the level of detail most appropriate for your needs.
- Monthly Cash Flow Statement Template
Designed for businesses that require frequent monitoring. It covers 12 consecutive months from any start date you choose and can help identify fluctuations and cash inflows and outflows. It can easily support your business’s monthly cash management and operational planning. You can identify in which month cash inflow exceeds cash outflow and in which months the opposite happens.
- Quarterly Cash Flow Statement Template
This template helps businesses review cash flow on a quarterly basis. Instead of a detailed report of every single month, it divides the reporting year into four main quarters: Q1, Q2, Q3, and Q4. This allows quarter-over-quarter comparison and helps identify broader seasonal or operational trends.
- Yearly Cash Flow Statement Template
This one is suitable for external reviews and situations where a quick summary of cash flow is required. It can be useful for annual financial reviews, recordkeeping, year-end planning, and financial analysis. Investors and lenders can use it to review how operating, investing, and financing activities affected net cash flow of the year.
- Multi-Year Cash Flow Statement Template
The multi-year cash flow template compares cash flow performance across multiple years. Our template includes four reporting years. Entering data for each reporting year can help identify long-term changes in cash generation and usage. Using this, you can easily evaluate financial trends over time, which can play a part in strategic planning, budgeting, and long-term financial analysis. It also makes it easier to spot where you are relying more on borrowing, investments, capital expenditures, and cash reserves.
Key Features of the Cash Flow Statement Templates
Here are the key features included in these cash flow templates:
Automatic cash flow calculations
These templates contain built-in formulas to calculate totals of operating, investing, and financing activities in both the cash inflow and outflow sections, as well as net cash flow. Monthly, quarterly, and multi-year templates even automatically update the beginning cash balance and ending cash balance. This reduces the need for repeated manual calculations.
Cash beginning and ending balance tracking
The yearly cash flow statement covers one reporting period and includes fields for the company name, prepared by, and fiscal year. The monthly, quarterly, and multi-year templates show several reporting periods side by side and cover 12 months, 4 quarters, or 4 years, respectively. Each period includes fields to track cash at the beginning and end of the period.
Separate blank worksheet
Each workbook in this collection includes a sample filled worksheet and a blank worksheet with the same structure and formulas. The sample sheet demonstrates how the categories and calculations work so that you can use the blank sheet accordingly.
Editable and customizable layout
These templates have an editable and customizable layout. You can add rows and labels according to your business requirements. Just make sure not to disturb built-in formula fields while doing so. Also, the information you enter varies by template: the yearly template includes a company name field, the monthly template uses a start date, the multi-year template uses a first year, and the quarterly template does not require a date or year field. Simply download the template and customize it according to your business types and reporting practices.
Financial analysis across different time periods
Each template in the collection satisfies different financial analysis needs. Monthly and quarterly cash flow sheets support relatively frequent monitoring, while yearly templates support annual review, and multi-year templates support long-term comparison.
Cash Flow Statement vs. Profit and Loss Statement
Cash flow statements help you track cash inflows and outflows of your business and evaluate its liquidity, cash availability, and seasonal trends. On the other hand, profit and loss statements help track revenue and expenses a business incurred during a specific reporting period. They focus on profitability. A balance sheet shows a business's financial position at a specific time using assets, liabilities, and equity.
Here, it is important to understand that a business reporting profit doesn’t indicate more cash, and experiencing negative cash flow doesn’t mean a loss.
Important Limitations / Disclaimer
These templates are designed for general financial planning, analysis, and recordkeeping. They are not a substitute for professional accounting advice. They do not automatically ensure compliance with US GAAP, IFRS, tax regulations, or other applicable reporting requirements. Classification of certain transactions may vary depending on the applicable accounting framework and business circumstances. Users preparing formal financial statements should consult a qualified accountant or financial professional.
