Cash flow statement:
The cash flow statement summarises the flow of cash into and out of the business over a certain period of time.
The cash flow statement measures the liquidity of the business (its ability to meet its debts in a timely manner).
The cash flow statement is one of the key financial statements for management accounting and is the primary statement managers would utilise in for the day to day running of the business.
A typical basic cash flow statement could look like the following:
|
Item Description
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
|
Receipts
|
|
|
|
|
|
|
|
Prof Fees / Commissions
|
32,000
|
36,000
|
38,000
|
30,000
|
40,000
|
38,000
|
|
Owner's Funds
|
|
20,000
|
|
|
|
|
|
Bank Loans
|
|
|
|
30,000
|
|
|
|
Total Receipts
|
32,000
|
56,000
|
38,000
|
60,000
|
40,000
|
38,000
|
|
|
|
|
|
|
|
|
|
Payments
|
|
|
|
|
|
|
|
Advertising
|
8,000
|
6,000
|
8,000
|
9,000
|
5,000
|
4,200
|
|
Wages
|
20,000
|
21,000
|
22,000
|
24,000
|
21,000
|
23,000
|
|
Telephone
|
3,000
|
|
|
4,000
|
|
|
|
Taxes
|
|
|
|
|
28,000
|
|
|
Other
|
10,000
|
11,000
|
12,000
|
15,000
|
10,000
|
13,000
|
|
Total payments
|
41,000
|
38,000
|
42,000
|
52,000
|
64,000
|
40,200
|
|
Net monthly movement
|
(9,000)
|
18,000
|
(4,000)
|
8,000
|
(24,000)
|
(2,000)
|
|
Opening Cash Balance
|
(4,000)
|
(13,000)
|
5,000
|
1,000
|
9,000
|
(15,000)
|
|
Closing Cash Balance
|
(13,000)
|
5,000
|
1,000
|
9,000
|
(15,000)
|
(17,000)
|