Anne-Marie Saint-John, Alva, Long Island City, NY >

Cash Flow Statements

The cash flow statement is your company’s budget. It is one of the most critical information tools for your business, as it tells you how much money you need to start your business and keep it running.

It also indicates when the money comes into the business and what expenses must be paid. The result is the profit or loss at the end of the month or year. Just as your personal budget may show you that you require more income to cover your expenses, if your cash flow statement shows a loss, you will need more income to cover your expenses.

Cash flow statements outline four things:

  1. Income:  Where does the cash come from (sales, investments, others).
  2. Expenses:  How the cash is used (costs, interest, taxes).
  3. Program:  When the activities took place (what month or quarter).
  4. Profit or Loss:  How much is left at the end of the analysis. If what remains is a positive value, it will be said that there was a profit. If what is left is a negative value, it will be said that there was a loss.

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