Gain valuable insights into your business performance with our free cash flow statement template. Use Otto AI to manage your finances and focus on growing your creative or small business.
A cash flow statement shows the money coming in and out of a business, including investments and assets, to ensure enough cash is available for daily expenses. It helps project future cash flow and is used alongside the balance sheet and income statement to assess a business’s financial health. Cash flow statements are also essential when seeking investment or loans, demonstrating that a business is profitable and using funds wisely.
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Cash flow format tracks the movement of money in and out of a business. It includes three key sections: operating activities, investing activities, and financing activities. Operating activities show daily business transactions, investing activities cover purchases or sales of assets, and financing activities highlight changes in capital, such as loans or equity. Understanding cash flow helps business owners manage liquidity, plan for future expenses, and ensure long-term financial health.
A cash flow statement highlights the movement of cash into and out of a business. It consists of three main sections: operating activities, investing activities, and financing activities. Operating activities show cash generated or used in daily business operations. Investing activities reflect cash flow from buying or selling assets. Financing activities track cash from borrowing or repaying debts, as well as equity financing, providing a comprehensive view of financial health.
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A cash flow statement helps you monitor cash inflows and outflows, ensuring you have enough liquidity to meet obligations. It gives a clearer picture of your financial health, beyond what’s shown in the income statement.
The main sections are: operating activities (day-to-day business operations), investing activities (buying/selling assets), and financing activities (loans, equity transactions). These sections help you understand how your business generates and uses cash.
Unlike the income statement, which records revenues and expenses on an accrual basis, the cash flow statement focuses on actual cash transactions, showing how much cash is available to your business at any given time.
Yes, a business can show profits on the income statement but still experience negative cash flow. This may happen if payments are delayed or large investments are made, affecting the cash available for daily operations.
A cash flow statement should be prepared regularly, typically monthly or quarterly. This helps businesses track liquidity trends, anticipate cash shortages, and make informed financial decisions.
