How Do You Prepare A Cash Flow Statement?
A cash flow statement is a document that shows how much cash (or cash equivalents) comes into a business and how much goes out. A cash flow statement is considered a necessary companion to an income statement and a balance sheet when evaluating the financial condition of a business. A cash flow statement can be presented in several different formats. However, complete, concise and clear disclosure of the movement of cash is the only true requirement for a cash flow statement. Cash flow statements commonly cover periods of one year or more, with more or less detail, depending on the intended use of the cash flow statement. This example of a first quarter cash flow statement for a new construction company, has been made very simple to illustrate the principles and components of the cash flow statement. Step 1 Gather the records you will need for your cash flow statement. Step 2 Verify that your ending cash balances for each accounting period agree with your reconciled bank statements. St
