Cash Flow Statement Analysis


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This material is a part of our PGPSE programe. Our programme is available for any student after class 12th / graduation. AFTERSCHO☺OL conducts PGPSE, which is available free to all online students. There are no charges. It is designed to give a comprehensive training in social entrepreneurship / spiritual entrepreneurship. This programme is aimed at those persons, who want to ultimately set up their own business enterprises which can benefit society substantially. PGPSE is a unique programme, as it combines industry consultancy, business solutions and case studies in addition to spirituality and social concerns. You can read the details at or at

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Cash Flow Statement Analysis

  1. 1. Cash flow statement analysis AFTERSCHO ☺ OL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
  2. 2. Cash flow statement analysis Dr. T.K. Jain. AFTERSCHO☺OL Centre for social entrepreneurship Bikaner M: 9414430763 [email_address] , AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS
  3. 3. What is cash? <ul><li>Cash or bank balance. </li></ul>
  4. 4. Methods of cash flow analysis? <ul><li>1. direct method </li></ul><ul><li>2. indirect method </li></ul>
  5. 5. Direct method <ul><li>Here you have to take each item individually and prepare cash flow statement to show the net impact and identify the flow of cash. </li></ul>
  6. 6. Indirect method…. <ul><li>Take profit from P & L account and adjust it for non-cash items. </li></ul>
  7. 7. Three componenents of cash flow statement… <ul><li>Cash from operations </li></ul><ul><li>Cash from financing </li></ul><ul><li>Cash from investing </li></ul>
  8. 8. Cash from operations… <ul><li>Indirect method : </li></ul><ul><li>Profit </li></ul><ul><li>Add + all non cash expenses / provisions etc. </li></ul><ul><li>Less = all non cash income etc. </li></ul>
  9. 9. Cash from financing <ul><li>If equity, debt, etc. increased, that means, there is more cash from financing </li></ul><ul><li>If equity, debt etc. decreased, that means there is application of cash. </li></ul>
  10. 10. Cash from investing…. <ul><li>If fixed assets and investments increased, it means, there is application of cash </li></ul><ul><li>If fixed assets & investments reduced, it means there is source cash and so cash from investing should increase. </li></ul>
  11. 11. What to add to profit (indirect method)? <ul><li>Depreciation </li></ul><ul><li>Loss on sale of fixed assets </li></ul><ul><li>Amortisation of intangible assets </li></ul><ul><li>Impairment </li></ul><ul><li>Bad debt </li></ul><ul><li>Interest (it will go to cash from investing or cash fro financing acticity) </li></ul><ul><li>(all other non – cash expenses/ provisions). </li></ul>
  12. 12. What to deduct from profit (indirect method) <ul><li>Profit on sale of fixed assets </li></ul>
  13. 13. Example: <ul><li>Profit : 5000 </li></ul><ul><li>(after deducting salary 1000, purchase 15000, depreciation 1000, goodwill written off 1000, rent 1000, wages 5000) </li></ul><ul><li>Solution: </li></ul><ul><li>Cash from operations (indirect method): </li></ul><ul><li>5000 + 1000 (dep) + 1000 (goodwill) </li></ul><ul><li>= 7000 answer. </li></ul>
  14. 14. About AFTERSCHO☺OL <ul><li>PGPSE - World’s most comprehensive programme on social entrepreneurship – after class 12 th </li></ul><ul><li>Flexible – fast changing to meet the requirements </li></ul><ul><li>Admission open throughout the year </li></ul><ul><li>Complete support from beginning to the end – from idea generation to making the project viable. </li></ul>
  15. 15. Branches of AFTERSCHO☺OL <ul><li>PGPSE programme is open all over the world as free online programme. </li></ul><ul><li>Those who complete PSPSE have the freedom to start branches of AFTERSCHO☺OL </li></ul><ul><li>A few branches have already started - one such branch is at KOTA (Rajasthan). </li></ul>
  16. 16. Workshop on social entrepreneurship <ul><li>We conduct workshop on social entrepreneurship – all over India and out of India also - in school, college, club, association or any such place - just send us a call and we will come to conduct the workshop on social entrepreeurship. </li></ul><ul><li>These workshops are great moments of learning, sharing, and commitments. </li></ul>
  17. 17. FREE ONLINE PROGRAMME <ul><li>AFTERSCHO☺OL is absolutely free programme available online – any person can join it. The programme has four components : </li></ul><ul><li>1. case studies – writing and analysing – using latest tools of management </li></ul><ul><li>2. articles / reports writing & presentation of them in conferences / seminars </li></ul><ul><li>3. Study material / books / ebooks / audio / audio visual material to support the study </li></ul><ul><li>4. business plan preparation and presentations of those plans in conferences / seminars </li></ul>
  18. 18. 100% placement / entrepreneurship <ul><li>AFTERSCHO☺OL has the record of 100% placement / entrepreneurship till date </li></ul><ul><li>Be assured of a bright career – if you join AFTERSCHO☺OL </li></ul>
  19. 19. Pursue professional courses along with PGPSE <ul><li>AFTERSCHO☺OL permits you to pursue distance education based professional / vocational courses and gives you support for that also. Many students are doing CA / CS/ ICWA / CMA / FRM / CFP / CFA and other courses along with PGPSE. </li></ul><ul><li>Come and join AFTERSCHO☺OL </li></ul>