Report

Cash flow and liquidity

Where each month's cash came from and where it went, derived from the books the company already keeps.

Cash Flow, a view of the CFO Foundry report with 4 KPIs and Cash flow statement.
  • 4 KPIs
  • CASH FLOW STATEMENT

Meridian is a fictional demo company. All figures are sample data.

Key questions

Did the profit turn into cash?

Operating cash flow starts from net income and corrects it for non-cash items and the change in working capital.

Where did the cash go?

Investing and financing cash flow show what went into fixed assets and loans, and what came from or went to lenders and owners.

How much cash is available?

Available liquidity is net cash plus the undrawn part of the credit lines.

In CFO Foundry

The group's cash flow workbook in Excel: operating, investing and financing by month, opening and closing cash, and net income against operating cash flow as a chart

The Excel Workbook

Download Excel exports the statement as a workbook, one per year. The subtotals and the net movement are formulas over the lines above them, and the view's charts sit under the statement.

Operating, investing, financing, plus the credit facilities

An indirect cash flow statement derived from the trial balance. The liquidity view shows cash, financial debt, net cash and available credit lines, for the group and for each entity.

Cash Bridge
Opening cash to closing cash through operating, investing and financing, with any unreconciled remainder as its own line.
Profit vs Cash
Net income and operating cash flow side by side, month by month.
Working Capital Impact
Cash released or consumed each month, before it shows up in the balance.

Cash Flow

KPIs
  • Operating CF
  • Investing CF
  • Financing CF
  • Net Cash Movement
Charts
  • Cash position
  • PROFIT vs CASH CONVERSION
  • Working capital impact
  • Cash bridge
Tables
  • Cash flow statement

Liquidity

KPIs
  • Liquid Assets
  • Financial Liabilities
  • Net Cash
  • Available Liquidity
Tables
  • Liquidity — cash positions

Derived from two month-ends

The cash flow statement is derived from the balance sheet at two month-ends, by the indirect method. Every movement of cash lands in one of three sections.

  • Operating: net income, depreciation and amortisation added back, and the change in net working capital
  • Investing: fixed assets, loans to group companies and financial investments
  • Financing: financial debt, capital paid in by the owners and distributions

The working capital in the operating section is the same net working capital as in the working capital view.

Opening cash to closing cash

Opening cash plus the three sections should equal closing cash at bank. Where a balance moved that none of the three sections covers, the difference stays visible as a line of its own, and the account mapping is where it is traced.

Liquidity and credit lines

The liquidity view lists every cash and bank account with its month-end balance, by entity. Financial liabilities are the current financial debt and the long-term bank loans, and net cash is cash at bank less financial liabilities.

Each credit line is recorded once with its limit, and its undrawn part adds to the available liquidity.

An overdrawn bank account stays a cash account with a negative balance. Moving it to liabilities is a booking decision, made in the books.

Terms

Indirect Method
A cash flow statement that starts from net income and works back to cash through the changes in the balance sheet.
Operating Cash Flow
The cash the operations brought in: net income corrected for non-cash items and the change in working capital.
Net Cash
Cash at bank less financial liabilities. A negative figure is net debt.
Available Liquidity
Net cash plus the undrawn part of the credit lines.
All Terms

Data sources

  • The monthly trial balance of each entity
  • The account mapping: cash and bank accounts, fixed assets, financial debt, equity and working capital
  • The credit lines, each with its limit
  • Monthly exchange rates, for entities that report in another currency

FAQ

How is a cash flow statement derived from a trial balance?

By the indirect method: it starts from net income and works back to cash through the changes in the balance sheet between two month-ends. CFO Foundry derives it every month from the trial balances and the account mapping.

Why do profit and cash differ in a month?

Invoices that are not yet paid, supplier bills that are not yet due, depreciation, investment and loan repayments all move profit and cash apart.

Are bank statements needed?

The monthly trial balances and the account mapping are enough. Bank balances come from the cash and bank accounts in the trial balance.

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