This guide will provide a basic overview of how you can use your balance sheet and income statement to generate a Statement of Cash Flows for your business. Statement of Cash Flows is probably the single most important document of your financial statements as it depicts how cash is being used and what that use is generating. A business can have a solid balance sheet and income statements but if it has negative cash flows it will most likely fail. Understanding the uses of cash in your business, and whether or not the business is sustainable, are key insights provided by the statement. The guide covers
- Flow of Capital
- Business Activities
- Financial Statements
- Cash Inflows
- Cash Outflows
- Analyzing your Statement of Cash Flows
This guide, in conjunction with the Balance Sheet and And Income Statement guide and the Income Statement and Break-even guide will provide you a strong foundation to analyze your financial statement and make sound decisions.