Did you know that many small businesses fail due to amateur cash flow management whether they are profitable or not? This article offers tips about cash flow projection, a free cash flow template, two free cash flow calculators, and explains the meaning of cash flow and cash flow statement.
Whether for business or personal finances, Cash Flow Management is a crucial part of financial management.
If you are here to download the free cash flow statement templates, and don’t want to read further about cash flows, here are the shortcuts:
- Download the Free Cash Flow Statement Excel Template
- Use the Free Online Cash Flow Calculator
- Use the Free Online Discounted Cash Flow Calculator
If you are here to learn more about the crucial part of financial management; Cash Flows, let’s start with the Cash Flow 101.
What is Cash Flow?
Cash flow is an expense or revenue stream that changes a cash account over a given period for a business, a project, or a financial product. There are two entries made for each category; Cash in & cash out. Activities such as operation income, financing, investing, donations & gifts bring in cash, while investments, expenses and donations take cash out of your cash flow. This can be said for both businesses and personal accounts.
What is Cash Flow Statement?
A “cash flow statement” or a “statement of cash flows” represents the amount of cash used & generated by a company, a person or a project within a given time period.
Cash flow statement is calculated by adding non-cash charges such as depreciation to net income after taxes. Cash flow is an important indicator of financial strength. Financial analysts use cash flow statements to measure a company’s financial strength and performance.
Free Cash Flow Statement Template
Here is a free cash flow statement excel template. I usually use this cash flow statement template to brainstorm new project ideas. When I have a new project or a business idea, first thing I do is to look at worst case & base case scenario cash flow projections by entering projected numbers in this excel sheet.
So, feel free to download the Cash Flow Statement I’ve been using and use it for your needs.
I have created this cash flow statement excel template to use as a quick and dirty cash flow projection tool for my ideas/projects. In no means, it is supposed to replace a well thought, quality cash flow statement. If you are preparing a cash flow statement for an important reason, such as presentation to potential investors, please use a professional business plan software. I use Palo Alto to create all of my own and my clients’ business plans.
Free Cash Flow Calculator
This is a great Online Free Cash Flow Calculator to use for quick projections. I’d recommend bookmarking it. Click to use the online cash flow calculator.
Free Discounted Cash Flow Calculator
Discounted Cash Flow is used to calculate the time value of money. Click to Use the online discounted cash flow calculator.
Understanding Time Value of Money in Cash Flow Concept
As a business owner, you have to clearly understand the Time Value of Money to be able to create accurate cash flow projections.
Time value of money shouldn’t be treated only from the financial perspective. Any small business owner should focus on time value of money for any type of cash flow projections and investment/funding decisions.
Article by Ahmet Kirtok
Ahmet KIRTOK is a New York City based entrepreneur and small business consultant. He is the founder & owner of Small Business Arena
Ahmet has contributed 69 articles.
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{ 2 comments… read them below or add one }
I think cash flow is a big problem for many small business owners. Poor cash flow is usually an indication of poor profit. Many businesses focus too much on increasing sales at the expense of profits. It is usually when there is a downturn in business, or seasonal fluctuation that many business owners realize they have a cash flow problem.
Cash flow is definately a big problem, especially for companies which don’t have readily available funds. Outsourcing certain serivces, such payroll, could be a good idea in order to free up some money.