![]() ![]() Examples of outgoing cash flow include paying back loans and interest, purchasing inventory, and paying salaries for yourself or your staff. You can’t pay your loans, or yourself, with a promise of future income.Īn example cash flow statement will also list any outgoing cash flow. However, while the sale of a mattress that is to be paid for at a later date is entered into your total sales revenue, any cash that hasn’t yet been received is deducted from your cash flow statement. Unlike a profit and loss account, which highlights revenue through sales, expenses and any losses suffered during the fiscal year, a cash flow statement for your shop will only highlight the revenue from operations, investments, and financing that are real cash operations.įor example, if you are running a retail shop where you extend credit to your customers, such as a mattress company that allows its customers to pay over the course of three months with no interest, any sale of a mattress that is paid up front would enter into your cash flow. However, even for companies that aren’t publicly traded (on the stock exchange), it is a great tool to help you understand your cash flow: where it is coming from, and where it is being spent. What is the purpose of a Cash Flow Statement?Ī cash flow statement is a financial form that is required for any publicly traded companies, alongside the balance sheet and profit and loss account.And in this article, we’ll explain what a cash flow statement is, why it’s important, how to prepare one, and provide an example of a cash flow statement for your shop. We’ve broken down these and other questions you may have into easy to digest articles. ![]() It’s important not to get bogged down by these foreign-seeming concepts. From business plans to tax reports, from profit and loss accounts to cash flow statements… It can all seem a bit overwhelming. As a new independent retailer, there are a number of terms and customs that you will need to familiarise yourself with. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |