Cash Flow Analysis and Sample Report

Analysis cash flow become important in the report cash flow, once you know example and how to make cash flow. After knowing how to count cash flow, the next thing is to do the analysis.

Analyze cash flow This is very important to do, because to find out the flow of business funds in and out so you can find out whether this cash flow is negative or positive.

In this article you will find out how to analyze cash flow until example template analysis that you can download. Check out the following discussion!

What is analysis cash flow?

After making a cash flow statement and calculating it, you need to analyze cash flow. What is analysis cash flow? Analysis cash flow is a method to find out the cash flow and projections of your business finances. 

It aims to see whether a company's finances are current or in deficit? Analyze cash flow It's also useful to see what the expected gains are. In addition, this analysis is also to describe the liquidity of your business.

Analyze cash flow This can be done in two stages, in the first stage you analyze each of the existing components. So, when you make a cash flow report for operating activities, cash for investing activities, and cash for financing activities, you can also make an analysis of each. However, you can also analyze cash flow at the end after the three components are completed and netcash flowalready counted.

How to analyze cash flow

Reporting from net suite There are five steps that must be considered to analyze cash flow.

1. Aim to create positive cash flow

Companies with smooth finances indicate that their operating income has income that is greater than net income. With large revenues and profits can maintain the company's operations to continue.

2. Be careful with positive cash flow

Not all positive cash flows indicate good cash flow, you have to check again whether all of the income and profits have also been used to pay off debts? Because, debts and taxes you must pay so that finances can be stable.

3. Negative cash flow analysis

You also have to analyze every expense paid by the company, and negative cash flow is actually not a bad thing if the funds spent are really needed for urgent operational needs.

4. Counting free cash flow

Before analyzing cash flow, you also have to count free cash flow. This is to find out what is left of operating expenses as well as capital expenditures, which can later be used to buy shares or acquire other companies.

5. Build confidence from operating activity cash flow margin

With the margin ratio of operating activity cash flow as well as a percentage of income and profit transactions in a certain period. Positive margins can also indicate efficiency and revenue quality.

What is the analysis result cash flow?

As mentioned in the opening sentence, analyzing cash flow This can be used to see how the final result of a company's cash flow is. Was the end result negative or positive?

• Positive cash flow

Positive cash flow is a situation where the amount of cash in is greater than the amount of cash out. You can identify the amount of cash that comes in from the operational flow section such as sales proceeds, or it can also come from the sale of shares, properties, assets, and profits from investments.

By generating positive cash flow shows transaction effort, up to investment costs it went smoothly and well.

• Negative cash flow

The opposite of positive cash flow, negative cash flow occurs when cash out is greater than cash in. This can happen when your business spends too much money on the purchase of equipment, property, or the expenses paid are not proportional to the sales results for that period.

Analysis example cash flow

Analyze cash flow now it's very easy, because you just need to download template analysis cash flow from Microsoft Excel for free. In fact, you just need to change the financial numbers directly according to the company you manage.

Download link: analyze templates cash flow

Making analysis cash flow This is very useful for managing finances, because with good and appropriate cash flow management it can help to develop the business that you are living.