You will find a cash flow statement tailored to your project in our list of 200+ financial plans
All our financial plans do include a cash flow statement.
How can you easily create a cash flow statement without getting overwhelmed?
In this article, we provide a free tool to do so. If you're looking for something more tailored to your specific project, feel free to browse our list of financial plans, customized for over 200 different project types here.
We'll also address the following questions:
What are the key components to include in a cash flow statement?
How long does it typically take to prepare a cash flow statement?
What tools or software can help in creating a cash flow statement?
How can future cash flows be accurately estimated?
What is the average percentage of operational cash flows relative to total revenue?
How long should cash flow statements be kept for compliance purposes?
What is the average cost of cash flow management software?
The document available for download is a sample financial forecast. Inside, you'll find the calculations, formulas, and data needed to get a cash flow statement as well as a full financial analysis.
This document, offered free of charge, is tailored specifically to the realities of running a restaurant. If you need a tool for your own project, feel free to browse through our list of financial forecasts.
If you have any questions, don't hesitate to contact us.
Here Are the Steps to Easily Create a Cash Flow Statement
To skip all these steps, you can simply download a financial forecast tailored to your industry.
- 1. Gather Initial Financial Data:
Start by collecting all projected financial data for your business. This includes your initial investment, which covers costs such as equipment, marketing, and initial inventory.
- 2. Estimate Monthly Revenues:
Project your monthly revenues based on your expected sales volume and pricing. For example, estimate how many units you plan to sell each month and at what price.
- 3. Estimate Monthly Expenses:
Identify all monthly expenses, including costs for raw materials, salaries, rent, utilities, and any other recurring costs. Sum these expenses to get your total monthly outflow.
- 4. Create the Opening Balance:
Begin your cash flow statement with the initial investment as the opening balance. This is the amount of money you start with before any revenues or expenses are accounted for.
- 5. Calculate Net Cash Flow for the First Month:
Add your projected monthly revenue to the opening balance and subtract the total monthly expenses. This will give you the net cash flow for the first month.
- 6. Determine the Closing Balance for the First Month:
Calculate the closing balance by adding the net cash flow to the opening balance. This will be the closing balance for the first month.
- 7. Repeat for Subsequent Months:
For each subsequent month, use the previous month's closing balance as the new opening balance. Repeat the process of adding monthly revenue and subtracting monthly expenses to find the net cash flow and closing balance for each month.
- 8. Review and Adjust:
Regularly review your cash flow statement and adjust your projections as needed. This will help you maintain a clear picture of your financial health and make informed decisions before launching your project.
What Should Be Included in a Cash Flow Statement?
Here are the key elements that should be included, all of which you will find in our financial forecasts tailored to 200+ different business projects.
| Element | Description | Examples | Category |
|---|---|---|---|
| Operating Activities | Cash flows related to the core business operations. | Receipts from sales, payments to suppliers, wages, taxes. | Cash Inflows/Outflows |
| Investing Activities | Cash flows related to the acquisition and disposal of long-term assets. | Purchase of equipment, sale of property, investment in securities. | Cash Inflows/Outflows |
| Financing Activities | Cash flows related to borrowing and repaying bank loans, issuing and repurchasing stock, and paying dividends. | Issuance of shares, repayment of debt, dividend payments. | Cash Inflows/Outflows |
| Net Increase/Decrease in Cash | The net change in cash and cash equivalents over the period. | Sum of cash flows from operating, investing, and financing activities. | Summary |
| Cash and Cash Equivalents at Beginning of Period | The amount of cash and cash equivalents at the start of the period. | Cash balance at the start of the fiscal year. | Summary |
| Cash and Cash Equivalents at End of Period | The amount of cash and cash equivalents at the end of the period. | Cash balance at the end of the fiscal year. | Summary |
| Supplemental Information | Additional details that provide context to the cash flow statement. | Interest paid, income taxes paid, non-cash investing and financing activities. | Additional Information |
Our financial forecasts are comprehensive and will help you secure financing from the bank or investors.
Common Questions You May Have
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What are the key components of a cash flow statement?
A cash flow statement typically includes three main sections: operating activities, investing activities, and financing activities.
Operating activities cover cash transactions related to the core business operations, such as sales and expenses.
Investing activities involve cash flows from the purchase and sale of assets, while financing activities include cash flows from borrowing and repaying debt, as well as equity transactions.
How much time should I allocate to prepare a cash flow statement each month?
On average, you should allocate 4 to 6 hours per month to prepare a detailed cash flow statement.
This time frame includes gathering data, entering it into your accounting software, and reviewing the final statement for accuracy.
As you become more familiar with the process, the time required may decrease.
What tools can help simplify the creation of a cash flow statement?
Accounting software like QuickBooks, Xero, or FreshBooks can significantly simplify the process of creating a cash flow statement.
These tools often come with templates and automated features that streamline data entry and calculations.
Additionally, spreadsheet programs like Microsoft Excel or Google Sheets can be customized to fit your specific needs.
How often should I update my cash flow statement?
It is recommended to update your cash flow statement on a monthly basis to ensure you have an accurate and up-to-date view of your financial health.
Regular updates help you identify trends and make informed decisions about your business operations.
In some cases, businesses with high transaction volumes may benefit from weekly updates.
What is the typical range of cash flow from operating activities for a small business?
The cash flow from operating activities for a small business can vary widely, but it typically ranges from $5,000 to $50,000 per month.
This range depends on factors such as the industry, business model, and scale of operations.
Monitoring this metric helps ensure that your core business activities are generating sufficient cash to cover expenses.
How can I forecast future cash flows accurately?
To forecast future cash flows accurately, start by analyzing historical data and identifying patterns in your cash inflows and outflows.
Use this information to create projections based on expected sales, expenses, and any planned investments or financing activities.
Regularly review and adjust your forecasts to account for changes in market conditions and business performance.
What is a healthy cash flow margin for a small business?
A healthy cash flow margin for a small business typically falls between 10% and 20%.
This margin indicates that your business is generating enough cash from its operations to cover expenses and invest in growth opportunities.
Maintaining a strong cash flow margin helps ensure long-term financial stability and resilience.