Operating Activities
Investing Activities
Financing Activities
Be on top of the cash flows that come in and go out of your business and evaluate where you stand in the path of your success. Stop spending time in preparing your cash flow statement with a single click generation and start analysing your business performance peacefully!
Explore cash flow statement
Cash flow statement is a branch of financial statement which shows the wealth of the company with a detailed cash flow movement in and out of the business. Cash flow is the fuel for any businesses, which makes the businesses run vigorously with the fund flow forecast, that builds strong confidence in the management.
Cash profit is more relevant than book profit, which defines the real health of a business for a sustainable future. For a business to be healthy, its wealth should be strong, which in turn can be analysed and forecast with the cash flow statement. A business with a consistent cash flow in their business can only survive. Even if they have hefty loans, cash flow inside their business helps them pay their debts, manage their expenses and invest in other ventures to make more profits.
mrakaf's integrated accounting software is spread across every branch of accounting for a business, especially for Retailers, Restaurateurs and Distributors. mrakaf aims in making business grow along with them. So, all type of financial reports especially growth infused reports are generated within the software with the POS data eliminating the need of manual intervention and process. mrakaf AccountsEasy lets you experience the below perks in cash flow statement to provide you with impactful insights for your business
Summarised and detailed cash flow statement, both group wise and ledger wise
Forecasts cash flows with a single click of projected cash flow report
Eliminates the need for maintaining multiple software with direct POS integrated accounting module
Track cash flow from operating, investing and financing activities, to understand the source and the application of your cash flows
Analyse trends in cash flow movement to predict your future cash flows so that the owner can be prepared for the working capital to be brought into the business
Understand the liquidity position of the business, so that business is insured against the perils of uncertainty when outflows have to be managed without sufficient inflows
The cash flow of a business can be arrived by two different methods. Each method is not tiring to the other. Both solve the same purpose of finding the flow of cash but the mode of calculation varies.
A cash flow statement generated in the direct method involves the complete cash transactions made for a period. The cash transactions include all receipts and payments made of cash and cash equivalents. Then summarizing each transactions into category and arriving at the final number. In fact, cash flow is actually calculated by finding the difference in opening and closing balances of cash and cash equivalents.
Cash flow statement generated from indirect cash flow method starts where the Profit and loss statement (P&L) ends, beginning from the "Net profit as per P&L" as the first line item. Then adjusting for non cash, non operating transactions and working capital changes to calculate the cash generated from operations. Indirect cash flow method categorized the summary of transactions in three different categories - Operating activities, Investing activities and financing activities as mentioned above. Depending on the type of transaction made, it should be added under the relevant category and should be adjusted.
The major difference between direct and indirect cash flow is indirect cash flow summarizes both cash and non cash transactions in a detailed level. Whereas direct cash flow summaries cash transactions and arrives at the conclusion of what has happened in between opening and closing balance.
A cash flow statement generated in the direct method involves the complete cash transactions made for a period. The cash transactions include all receipts and payments made of cash and cash equivalents. Then summarizing each transactions into category and arriving at the final number. In fact, cash flow is actually calculated by finding the difference in opening and closing balances of cash and cash equivalents.
Step 1: Login to mrakaf ERP and open the integrated accounting software AccountsEasy
Step 2: Open the reports and select cash flow statement. We can find the statement of cash inflows and outflows for any given financial period with the category of transaction
That's it. It as easy as opening a document. Once the report is opened, the transactions made in the ERP and accounting software are listed automatically in the cash flow statement in a consolidated manner. This shows the exact flow of cash inside the business.
From this cash flow statement, we can infer that the net cash flow for the financial year 2021-2022 is ₹6,13,000. When we look into the cash flow from operations, we can clearly see the company is pumping in good value of money which in turn made their cash flow from operations to be in a positive side.
Generating more money from their operations made them invest in the equipment. Since they have made a huge investment in equipment that help them increase more profits in the future, their cash flow from investing falls in the negative zone.
Last comes the cash flow from financing. They have brought new investments from a bank, yet they paid back some of the money to their investors which made the net cash flow from financing activities positive. By summarizing the cash flow from these categories it's clear they have made a good turnover in the financial year and plenty of cash flow in the business.
A cash flow statement is a financial instrument that helps in analysing the flow of cash in the organization. In order to forecast a cash flow in an organization, there are various ways to arrive it. One such way is listing all the transactions, grouping them and summarizing them to arrive a final cash flow. Other is getting the cash flow for a period in a single click. The first one is the traditional way of forecasting that requires a lot of time. The second one is the way of generating using mrakaf. As you know it happens in a matter of seconds! Forecasting cash flow is the biggest part, yet analysing, managing and improving it is the most essential and real purpose for a cash flow statement generation. By forecasting the cash flow statement, the following metrics can be monitored and improved in order to increase the flow of cash in the business.
1. Bring in your money that customers owe
Identify the money that you earned from your customers but to be brought in your hand with the cash flow statement and send them a follow-up email/reminder with their outstanding statement.
2. Cut the costs that sleeps in your inventory
Easily forecast the money that sits in your inventory as dormant item and start selling it as combos or offers and avoid overstocking of non moving items by forecasting your inventory. This can be easily found if the operating expense exceeds the flow of cash (sales) into the organization.
Flow of cash in and out under each category can be drilled and narrowed till group wise and ledger wise
Month wise summary can be arrived directly from the analysis of cash flow for a period of year
Comparing balance sheet and income statement can be seized as cash flow statement collects it all without any intervention
Cash flow statement in financial accounting is a statement which shows the flow of cash and cash equivalents that affects the balance sheet and income statement. In fact, the cash flow statement breaks the analysis into operating, financial and investing with detailed information under each section.
Cash and cash equivalents are the part of the balance sheet which determines the value of the company considering the assets which are the form of liquid cash. Cash is the direct cash that comes into a company through transactions. Cash equivalents include commercial paper, marketable securities, short term government bonds and short term bank deposits
The cash flow statement considers all the transactions for a selected period, but those transactions will be grouped under three main category to simplify and derive impactful insights from the cash flow statement. Those components are:
- Cash flow from operating activitie
- Cash flow from financial activities
- Cash flow from investing activities
You can generate and analyse your statement of cash flow by using the mrakaf ERP trail for free. Click the button below to get started.