Creating A Cash Flow Statement JR

When you are creating a cash flow statement you are essentially creating a pathway for which cash is flowing. Sounds pretty simple right? I thought so too, not only is this video going to show you how to successfully make a cash flow statement but show you all of the steps involved. First would be the basic understanding of what a cash flow statement actually is, once you know this the rest simply pieces itself together.

First you have to know that cash is not just simply determined as cash. There are cash and cash equivalents such as currency, checks on hand, deposits on hand, treasury bills etc. The more you study cash flow statements the more your understanding of these cash equivalents becomes. You may be asking yourself why this thing is even important? Well cash in itself is the most important asset for a business not knowing where your cash is being spent or used could be disastrous to your business.

So now that you have learn these basic things. Where are some places that your cash is going to go? Well first off your cash could be spent on several different types of activities. For one would be financial activities, another investing activities, and there are more and more to learn but lets just use these two for now. If you can dissect the word financial and think about where it would for your money you could figure out that financial activities would be things like paying something off, long term debt, short term debt, things you need to finance. With that being said, understanding the cash flow statement is going to be very easy if you use these simple concepts you will be able to create a cash flow statement and have a great understanding of the cash flow statement.