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Cash flow statement
Let us start with a simple cash flow format;
Cash in: Customers
New loans
Share issues
Disposal of assets
Divestment
Investment income
Aqhuman financial training & coaching
Cash out: Suppliers
Loan repayments
Share buybacks
Capex
Acquisition
Interest/tax/
dividends
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Cash flow statement
Cash in X
Cash out ( X)
Net cash flow X
Opening balance X
Closing balance X
Aqhuman financial training & coaching
The cash flow
simply shows
the cash in and
out , the starting
position and
thus the closing
position
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Cash flow statement
Cash from operations (customers – suppliers)
Cash from financing (new shares-buybacks+new loans-repayments-interest)
Cash from investing activities (Disposal of asset+divestments-capex-acquisitions-
dividends)
Tax paid
Aqhuman financial training & coaching
The cash flow is
normally shown with
similar items grouped
together
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Cash flow statement
The cash flow is popular as:
-There are no funny accounting rules; did the
cash come in/out or not?
-Company survival is a cash matter
-Growth only comes from generating cash (in
order to hire more staff, buy other companies,
buy/lease more buildings ...)
Aqhuman financial training & coaching
5. www.aqhuman.com
Why profit cash flow
•The income statement is an activity based statement; sales
go in when they are earned, costs when they are used.
Neither is shown when they are collected or paid for (ie credit
given or taken)
•The income statement ignores certain investment activity
(buying new equipment, selling a business)
•The income statement ignores certain financing activity
(share issues, loan repayments)
•Depreciation is a cost for p&l purposes but does not
represent a cash flow
Aqhuman financial training & coaching
6. www.aqhuman.com
Aqhuman Financial Training
Aqhuman’s principal is Kevin Amor, FCA. Kevin qualified as a
chartered accountant with PWC. He spent 12 years working
in commerce at financial controller/director level.
Kevin now has more than 12 years experience in financial
training. He trains managers at all levels and gives 1 to 1
financial coaching to senior executives.
He also teaches corporate finance and
accounting for a number of business
schools’ MBA programmes.
Aqhuman financial training & coaching
