Cash Flow Funding

Changes in Cash Flow Funding

The net cash flow in or out for a business for an accounting period must be matched by changes in cash flow funding.

If we use the example cash flow statement below, the top half of the cash flow statement shows the cash flows in and out due to operating. financing and investing activities, the final figure (highlighted in green) represents the net cash flow out of the business, in this case 57,000.

In order for this to happen, the business must match this cash flow out with additional cash flow funding.

The bottom half of the cash flow statement (highlighted in blue) shows how this additional cash flow funding has been found by showing the changes in the various sources of funds available.

In this example a net cash flow out of the business of 57,000 has been funded by an increase in the overdraft of 43,000, an increase in loans of 9,000, and finally the owner has injected a further 5,000 of capital.

Cash Flow Funding
Receipts from trade (EBITDA) 8,000
Less to fund working capital -30,000
Operating Cash Flow -22,000
Interest paid 2,000
Bank loan repayments 20,000
Other loan repayments 1,000
Financing Cash Flow 23,000
Capital expenditure on fixed assets 14,000
Capital receipts from the disposal of fixed assets -2,000
Investing Cash Flow 12,000
Net cash received/(paid) -57,000
Bank overdraft 43,000
Bank loans 9,000
Owners Capital 5,000
Change in funding 57,000

The two sides must always be equal, that is to say the net cash flow in or out of the business must be matched by changes in cash flow funding.

Cash Flow Funding July 20th, 2017Team

You May Also Like

Related pages

define daybookmarkup percentage calculatordepreciation residual value calculationmoney ledger printablediminishing balance method depreciation calculationcalculation of payback period examplecredits and debits for dummiesnominal annual rateaccounting for petty cashbookkeeping practice testmulti step income statement definitionhow to calculate fifopresent value of a growing annuityinventory turns calculatordebit and credit entrieshow to calculate bad debt expensewhat is meant by debtorsunearned revenue journal entriesmargin markup calculatorbank reconciliation journal entries exampledouble entry depreciationexcel bookkeepingdeferred revenue adjustmentwithholding tax entryfreight on board originconvert cash calculatordupont analysis spreadsheetsalary received journal entrydays sales outstanding formulalease accounting entriespresent value of annuity calculatorpresent value of a perpetuitydefine freight collectblank inventory templatedividend statement templatevariable cost formula per unitfinancial statements for non profit organizations examplenotes receivablesdefine adjusting entriesamortized bondscalculate the asset turnover ratiocompute the depreciation cost per unitpv of annuity due calculatoraccounting for restaurants chart of accountsaccounting entries for accruals and prepaymentsaccounting rate of return disadvantagesis manufacturing overhead a fixed costvalue of annuity calculator futuredepreciation schedule straight line methodhow to calculate mirrcash denomination formathow to figure out lease paymentswhat is cash float in accountingnotes payable journal entrywhat is folio in accountinginventory sheet template excelnine steps of the accounting cyclejournal entry for accounts receivablespreadsheet bookkeepingifrs journal entrieshow to calculate profit markupcreditor definition accountingcalculate percent markupstock valuation equationbookkeeping cheat sheetwhat is the normal balance of accounts payabledoubtful accounts journal entrywhat gaap stands fortrial balance format in exceltotal conversion cost formulayear end closing entriesaccounts receivable turnover ratio calculatordefine accrued incomezero coupon bond journal entry