Online Test Banks
Score higher
See Online Test Banks
eLearning
Learning anything is easy
Browse Online Courses
Mobile Apps
Learning on the go
Explore Mobile Apps
Dummies Store
Shop for books and more
Start Shopping

Business Plan Cash-Flow Statement: Total Funds In

The cash-flow statement tracks every single dollar as it comes into your small business — and not a second before. You can’t show the revenue on sales, for example, until you actually have the payment in hand. Following are the income sources that the cash-flow statement tracks:

  • Receipts on sales: The money you take in from the sales of your products or services show up in this section, but only after they’re deposited in the bank. Billing a customer may be enough to generate a revenue entry on your income statement, but you can’t include the amount on your cash-flow statement until you have a deposit slip to show for it.

  • Dividend and interest income: Any interest you make on your business bank accounts or any earnings from your investment portfolio appear in this section — if the payments come in during the statement period.

  • Invested capital: If your company receives funding from investors, on the date the money reaches your business, it’s entered here on your cash-flow statement.

The Broad Street Emporium cash-flow statement shows that the gift store took in $740,000 cash last year. That number synchs with entries on the company’s income statement and balance sheet.

image0.jpg

Here’s how it works: The income statement shows gross income of $729,000 and income from dividends and interest of $3,000.

image1.jpg

Plus, the balance sheet shows that the company also received $5,000 of investment capital from its owners. (This money is reflected in the entry for invested capital, which went from $195,000 the previous year to $200,000 last year.)

image2.jpg

Additionally, the company collected $3,000 in outstanding accounts receivable last year (shown on the balance sheet as a reduction in accounts receivable from $18,000 to $15,000). Together, these funds total $740,000, exactly as indicated by the cash-flow statement. Ta-da!

  • Add a Comment
  • Print
  • Share
blog comments powered by Disqus
Advertisement

Inside Dummies.com

Dummies.com Sweepstakes

Win $500. Easy.