Cashflow Statements

Today we are discussing about cashflow Statements and importance of same in our business activities.
Cashflow comes in company  from Operating Activity ,Financial Activity ,Investing Activity .

1) Operating Cashflow :-Working Capital 

CapEx :- Capital Expenditure like computers office and furnitures .
OpEx:- Operating Expenditure like LigjtBill ,Salary of staff . 

2) Financing Cashflow :-  On debt Basis taken from.financial institution .

3) Investing Cashflow :- Investment done by company to reduce costs .

Free Cash Flow :-
 Operating Cashflow - Investing Cash Flow 
This figure must be positive all times .

Credit sales is not part of cashflow Statements ,it will be part of operating inflow after credit period ends.
Cash sales is operating cash inflow .

If you study the cashflow of startup company ,3-5 years old company and well established firm you found that from Negative to Positive in some years . 

Indirect Method 

Netincome + Depreciation + Creditors - Debators- inventory .


Investing Cashflow 
Payback Period = Purchase Value/ Net Profit 

For proper cashflow managment after service team has to raised invoice second day . 

Later in this blog I will try to add up some files of cashflow statement .



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