How to Prepare a Statement of Cash Flows

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How to Prepare a Statement of Cash Flows
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Calculating Beginning Cash and Cash Equivalents
1. Determine the ending cash balance from the
prior year 2. Add up the value of all of the cash
and cash equivalents 3. Establish the beginning
cash balance for the current year
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Calculating Beginning Cash and Cash Equivalents
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2. Add up the value of all of the cash and cash
equivalents
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3. Establish the beginning cash balance for the
current year
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Calculating Cash Generated from Operations
1. Start with net income 2. Adjust for
depreciation and amortization 3. Make adjustments
for accounts payable and accounts receivable 4.
Calculate net cash generated from operations
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• Start with net income

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2. Adjust for depreciation and amortization
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3. Make adjustments for accounts payable and
accounts receivable
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4. Calculate net cash generated from operations
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Calculating Ending Cash and Cash Equivalents
1. Determine the net increase or decrease to
cash 2. Calculate ending cash and cash
equivalents 3. Use the cash flow statement to
evaluate the companys financial health
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1. Determine the net increase or decrease to cash
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2. Calculate ending cash and cash equivalents
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3. Use the cash flow statement to evaluate the
companys financial health
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For More Information Financial Cash Flow