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Excel Statements Of Cash Flows

As any business owner or manager will tell you, you can’t run a successful enterprise without carefully monitoring your finances. The money your company has at its disposal determines how much you’ll be able to pay your employees, promote your brand, provide for customers, set aside for further investment, and much more. In previous decades, executives had to calculate their cash flow using handwritten charts and analog calculators, but those days are long gone. Nowadays, sophisticated software systems have revolutionized these more tedious accounting tasks. While there are many ways to create a statement of cash flow, the Microsoft masters at Get Excel Help know that Excel is, in fact, the best way to do so.

What is a Statement of Cash Flow?

In order to leverage Excel statements of cash flow, you first need to understand what they are and what they report. According to the Oxford English Dictionary, “cash flow” is defined as “the total amount of money being transferred into and out of a business, especially as affecting liquidity [meaning its value or usability in terms of cash].” The concept of cash flow is simple enough – it describes the money being added to and subtracted from a company’s accounts.

Essentially, a statement of cash flow reports on these important figures. Investopedia explains: “the statement of cash flows or the cash flow statement, as it’s commonly referred to, is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.” Furthermore, rather than just providing overall money in and money out, a statement of cash flow breaks down the precise sources of income and debt.

Statements of cash flow are crucial for internal management, but they are also pivotal reports for public companies. Many businesses share these documents with their investors on a quarterly basis to keep them updated on their fiscal status. These reports are often combined with balance sheets and P&L or income statements to offer a comprehensive view of a company’s finances.

Why Cash Flow Matters

Amidst a pile of accounting papers and reports, it’s easy for statements of cash flow to get lost in the shuffle. Compared to expense reports, balance sheets, payroll documents, and other paperwork, they may seem relatively inconsequential. However, the fact of the matter is that statements of cash flow do matter quite a bit to a business.

Cash flow metrics are essential to understand because, if an executive only considered an enterprise’s total revenues or total debts, he or she might not have a complete picture of how the company was actually doing. Often, very successful businesses have substantial debts to pay (for payroll, supplies, promotion, etc.), but they bring in even more money, providing net profits. In contrast, a company that has substantial gross revenue could be looked upon as successful, but have such burdensome debts that it isn’t truly doing well.

In addition, a statement of cash flow helps professionals distinguish between activities that contribute to the liquidity of their company (such as cash in for services rendered) and earnings that typically do not (like interest earned on investments but not yet paid out).

A statement of cash flow also breaks down where cash in and cash out comes from. This allows executives to understand which business pursuits provide the most viable cash and where these resources go. For these reasons and more, Investopedia calls statements of cash flow “a valuable measure of strength, profitability, and…the long-term future outlook for a company.” These reports can assist you in aptly planning your future sustainability and expansion.

Furthermore, it’s especially important for that statements of cash flow for publicly traded companies be clear, precise, and easy to read. In these cases, cash flow reports reflect not only your venture’s financial situation, but your entire corporate brand.

If you’ve discounted the significance of statements of cash flow, now is the time to start taking them seriously.

Compiling a Conventional Statement of Cash Flow

To fully harness the power of these crucial reports, you must know how to create them. Unfortunately, given the complexity of cash and non-cash transactions a large company or even a small business makes on a daily basis, statements of cash flow can be very difficult to write up.

First, you’d have to track down every source of income and debt your company has, including calculating the exact statistics for each. Next, you’d need to determine which activities fall into which categories (cash or non-cash). Finally, you’d have to figure out how to clearly arrange all of this information on a page so you, your colleagues, and your investors can begin interpreting it.

Even with the assistance of digital documents, archives, emails, and calculators, this process can be a substantial headache, particularly for a busy executive, manager, or accountant.

How Excel Enhances Statements of Cash Flow

You likely already use Excel to record and store vital financial information, but what you may not realize is that this innovative software can also do much of the reporting work for you. This includes statements of cash flow.

The Get Excel Help team can show you how to set up Excel such that the application gathers all the cash flow information you need, accurately sorts the data, and generates a clean, readable report in mere minutes. We can help you make the most of existing statement of cash flow reports from Excel itself. Our team will consult with you about your wishescustom-code solutions tailored to your business’s particular needs, and train you in generating your very own statements of cash flow. In addition, we can ensure that your statements of cash flow present your financial information in a compelling, professional format that is sure to impress your shareholders.

Automating and improving your statements of cash flow can save you and your team monumental time, energy, effort, and hassle. In this way, using Excel for these critical financial reports could make a major difference in your efficiency, productivity, corporate image, and even cash flow.

Upgrade Your Statements of Cash Flow with Get Excel Help

Our experienced, passionate team of Excel experts would be delighted to help you more easily and quickly create better statements of cash flow. Contact us today to learn more about this and other state-of-the-art services.

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