Cash Flow Statement

The Cash Flow Statement (also known as the Statement of Cash Flows) is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents. It breaks down the analysis to Operating Activities, Investing Activities, and Financing Activities over a specific period. Essentially, it tracks the movement of actual cash into and out of your business.

Purpose of the Cash Flow Statement

The Cash Flow Statement in LeapCount helps you:

Assess Liquidity: Determine if the business has enough cash to meet its short-term obligations.
Understand Cash Generation: See where your cash is coming from (operations, investments, financing) and where it's going.
Evaluate Solvency: While the Balance Sheet shows a snapshot of solvency, the Cash Flow Statement shows the ability to generate cash to meet debt obligations.
Make Financial Decisions: Inform decisions about investments, financing, and managing working capital.
Identify Cash Flow Problems: Pinpoint potential shortfalls or areas where cash is being tied up unnecessarily.
Complement P&L and Balance Sheet: The P&L shows profitability (which can include non-cash items like depreciation or credit sales), while the Cash Flow Statement focuses purely on cash movements.

Key Sections of a Cash Flow Statement

Cash Flows from Operating Activities: Cash generated from the normal day-to-day business operations (e.g., cash received from customers, cash paid to suppliers and employees).
Cash Flows from Investing Activities: Cash flows related to the purchase and sale of long-term assets and other investments (e.g., buying or selling property, plant, and equipment (PP&E), purchasing or selling securities).
Cash Flows from Financing Activities: Cash flows related to debt, equity, and dividends (e.g., issuing or repurchasing stock, taking out or repaying loans, paying dividends).
Net Increase/Decrease in Cash: The sum of cash flows from the three activities.
Cash at Beginning of Period: The cash balance from the start of the reporting period.
Cash at End of Period: The resulting cash balance at the end of the reporting period.

Key Features in LeapCount

Beautiful Report UI/UX: LeapCount provides a clear and well-structured Cash Flow Statement, simplifying the analysis of your company's cash movements.
Flexible Period Selection: Choose the specific period for which you want to analyze cash flows.
Insightful Categorization: Clearly see cash inflows and outflows categorized by operating, investing, and financing activities.
Customer Impact on Cash Flow: While direct customer filtering on the entire statement isn't standard, analyzing 'Cash received from customers' within Operating Activities is crucial. This often ties back to customer payments and receivables management, highlighted in Ageing Reports.
Drill-Down Capabilities: Investigate the specific transactions that contribute to the cash flow figures in each section.

When to Use the Cash Flow Statement

Regularly (e.g., monthly) to monitor cash position and manage working capital.
When planning for significant expenditures or investments.
To assess the company's ability to generate cash to fund operations and growth.
Alongside the P&L and Balance Sheet for a complete picture of financial health.

Understanding your cash flow is critical for the survival and growth of any business. The Cash Flow Statement provides this vital insight.