A simple cash flow intended for management reporting. Gives a general description of Cash flow along with examples. Excel formats are included.

1. A Simple Cash Flow
Management reporting

2. Introduction
 Cash Flow is one of the main five financial statements that a firm depends on in managing its
activities.
 The main purpose of a cash flow is to provide relevant information about cash receipt and
cash payments of an entity during a period of time.
 The cash flow should help the reader in assessing the ability of the firm to generate future net
cash – liquidity, its ability to meet obligations – solvency and its financial flexibility.
 It explains the change in cash and cash equivalents during a period of time.

3. Cash Flow Sections
 A cash flow consists of 3 sections:
 Cash from operation activities.
All transactions that are primarily derived from the principal revenue producing activities. They generally result
from transactions and other events that enter into the determination of net income.
 Cash from investment activities.
Those transactions that represent the extent to which expenditures have been made for resources intended to
generate future income and cash.
 Cas from financing activities.
Generally involve the cash effects of transactions and other events that relate to debt and equity instruments.

4. Example
Operation Activities
Net Income for the year
Change in Accounts Receivables
Change in Accounts Payable
Change in Inventory
Interest
Net Cash Flow from Operation Activities A
Investment Activities
Sale of property
sale of investment security
purchase of property
Purchase of investment security
Net Cash Flow from Investment Activities B
Financing Activities
Issuance of Stocks
Borrowing
Repurchase of own stocks
Repayment of loan
Net Cash Flow from Financing Activities C
Net Cash Increase/Decrease A+B+C = D
Cash at the beginning of period E
Cash at period end D+E
Cash Flows are more
complicated that this
example
The format represents
the indirect method of
cash flow

5. Make It Simple
 With management reporting there is no need to follow the accounting standards. Hence, any
format or preparation method is acceptable as long as it delivers the message.
 The target is to recognize cash inflows and out flows and reconcile ending cash calculated in
the cash flow to the bank account.
 The simplest structure is
 Beginning Cash Balance
 Revenue/cash inflow streams
 Expenses/cash out flow streams
 Ending Cash Balance that matches the bank account

6. Example
Currency Q1 2017 Q2 2017 Q3 2017 31-Oct 30-Nov 31-Dec Q4 2017
Opening Cash Balance A A A A A A A
RECEIPTS Customer 1
Customer 2
Customer 3
Customer 4
Dividend 1
Shareholders Loan
Commercial Loan
Total Expected Receipts B B B B B B B
Total Cash Available A+B= C A+B= C A+B= C A+B= C A+B= C A+B= C A+B= C
PAYMENTS Vendor 1
Vendor 2
Other
Total Operating Activities D D D D D D D
Loan Commission payment
Government Loan Repayment
Government interest Fees
Hedging
Shareholder Loan Repayment
Reserve Account
Debt Service Account
Debt Service Reserve Account
Dividend
Total Financing Activities E E E E E E E
Total Expected Payments D+E= F D+E= F D+E= F D+E= F D+E= F D+E= F D+E= F
Closing Cash Balance C-F C-F C-F C-F C-F C-F C-F