Want to Create Wealth in Your Company

CASH IS KING 👑 Learn to understand why below 👇

Statement of Cash flows

This section of the financial report shows us how cash has flowed through the business during the period.

It is a statement showing the starting cash, add receipts and cash made, less cash spent to give us the closing cash position.

This is further broken down into 3 seperate business activities:

• Financing activities — these are the flows of cash used to fund the company, usually focused around debt, equity and dividends.

Any capital raised form banks, investors or shareholders also shows under financing activities, so in summary:

Investments

Dividends received and or paid

and Loans received and or repaid

• Secondly we have Operation activities which shows the amount of cash used and received around the company’s ongoing regular business activities such as manufacturing and selling goods and services.

Other items included within operating activities would include items such as:

Rent, Income tax and employee pay etc.

• We then have the third type of activity, being Investing activities.

This is a section of a cash flow that shows the cash generated or spent relating to — you guessed it — investments

This would include items such as purchase of physical assets, plant, machinery or equipment.

Investments in securities

Or the sale of these assets or securities

In terms of your whole cash flow in general, we want to be asking ourselves

is the cash flow positive or negative?

If negative, then why?

Are the operations of your business strong enough without financing or investments?

DM me or comment below if you need assistance with your cash flow 👍

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