Cash Flow Statement Calculator
This calculator helps business owners and financial analysts to determine the cash flow of a business over a specified period. It assists in identifying the net cash available, aiding in financial planning and management.
Cash Flow Calculator
Results
Data Source and Methodology
All calculations are based on standard accounting principles. For detailed guidelines, refer to the Financial Accounting Standards Board (FASB). All calculations are rigorously based on the formulas and data provided by this source.
The Formula Explained
The formula used to calculate the operating cash flow is:
\[ \text{Operating Cash Flow} = \text{Net Income} + \text{Depreciation} + \text{Changes in Working Capital} \]
Glossary of Terms
- Net Income: The total revenue minus expenses, taxes, and costs.
- Depreciation: A reduction in the value of an asset over time.
- Changes in Working Capital: The difference in current assets and current liabilities.
- Operating Cash Flow: The cash generated by the normal operating activities of a business.
Example Calculation
How It Works: A Step-by-Step Example
Suppose a business has a net income of $100,000, depreciation of $10,000, and changes in working capital amounting to $5,000. The operating cash flow would be calculated as follows:
\[ \text{Operating Cash Flow} = 100,000 + 10,000 + 5,000 = 115,000 \]
Frequently Asked Questions (FAQ)
What is a Cash Flow Statement?
A cash flow statement is a financial document that provides aggregate data regarding all cash inflows and outflows a company receives.
Why is Cash Flow Important?
Cash flow is crucial for maintaining the liquidity of a company, ensuring it can meet its financial obligations.
How often should I calculate cash flow?
Cash flow should be calculated regularly, such as monthly or quarterly, to ensure ongoing financial health.
What affects cash flow?
Cash flow can be affected by changes in revenue, expenses, accounts receivable, and accounts payable.
Is cash flow the same as profit?
No, profit is the financial gain after all expenses are deducted from revenue, whereas cash flow focuses on the actual cash available.