The Cash Flow Statement of QuickBooks' Business Plan Workbook - dummies

The Cash Flow Statement of QuickBooks’ Business Plan Workbook

By Stephen L. Nelson

The Cash Flow Statement schedule has 16 rows of calculated data. As in other schedules, a period identifier numbers the periods for which values are calculated. The first period is stored in cell C141 as integer 1. Periods that follow are stored as the previous period plus 1. Other Cash Flow Statement values are calculated as described here.

image0.jpg

Beginning Cash Balance

The Beginning Cash Balance figures show the forecasted cash and equivalents balance at the start of each forecasting period. The starting balance is the value that you enter in the inputs area of the business planning starter workbook. For subsequent periods, the Beginning Cash Balance is the previous period’s Ending Cash Balance.

Net Income After Taxes

The Net Income After Taxes figures show the amounts calculated in the Income Statement schedule as the business profits for each forecasting period.

Addback of Depreciation

The Addback of Depreciation figures show the change in the accumulated depreciation balance for each forecasting period. Normally, this change stems from the period depreciation expense; it must be added back into the Net Income After Taxes figure because the depreciation expense uses no cash. The depreciation added back for each period is the value that you enter in the inputs area of the business planning starter workbook as the change in accumulated depreciation.

Accounts Payable Financing

The Accounts Payable Financing figures show the change in the Accounts Payable balance for the period. Increases in this balance result when the cost of sales expense paid during the period is lower than the expense incurred. Decreases in this balance result when the cost of sales expense paid is higher than the expense incurred.

By recognizing the changes in this account balance, the model adjusts for differences between the Income Statement’s accrual-based accounting of cost of sales expenses and the actual cash disbursements for cost of sales expenses.

The Accounts Payable Financing figure for each period is the difference between the Accounts Payable balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C57 – B57

The formula for the second period is

=D57 – C57

and so on.

Accrued Expenses Financing

The Accrued Expenses Financing figures show the change in the accrued expenses balance for the period. Increases in this balance result when the operating expense paid during the period is lower than the expense incurred. Decreases in this balance result when the operating expense paid during the period is higher than the expense incurred.

By recognizing the changes in this account balance, the model adjusts for differences between the Income Statement’s accrual-based accounting expenses and the actual cash disbursements for operating expenses.

The Accrued Expenses Financing figure for each period is the difference between the Accrued Expenses balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C58 – B58

The formula for the second period is

=D58 – C58

and so on.

Other Current Liabilities Financing

The Other Current Liabilities Financing figures show the change in the Other Current Liabilities balance for the period. This amount increases when, either directly or indirectly, cash is generated by borrowing. This amount decreases when, either directly or indirectly, cash is used to pay off short-term borrowing.

The Other Current Liabilities Financing figure for each period is the difference between the Other Current Liabilities balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C59 – B59

The formula for the second period is

=D59 – C59

and so on.

Long-Term Liabilities Financing

The Long-Term Liabilities Financing figures show the changes in the long-term liabilities amount for the period. This balance increases when, either directly or indirectly, cash is generated by long-term borrowing. This amount decreases when, either directly or indirectly, cash is used to pay off long-term borrowing.

The Long-Term Liabilities Financing figure for each period is the difference between the Long-Term Liabilities balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C62 – B62

The formula for the second period is

=D62 – C62

and so on.

Other Noncurrent Liabilities Financing

The Other Noncurrent Liabilities Financing figures show the changes in the Other Noncurrent Liabilities balance for the period. This amount increases when, either directly or indirectly, cash is generated by other long-term borrowing. This amount decreases when, either directly or indirectly, cash is used to pay off other long-term borrowing.

The Other Noncurrent Liabilities Financing figure for each period is the difference between the Other Noncurrent Liabilities balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C63 – B63

The formula for the second period is

=D63 – C63

and so on.

Accounts Receivable Investments

The Accounts Receivable Investments figures show the change in the Accounts Receivable balance for each forecasting period. This amount increases when the sales revenue collected during the period is less than the revenue recorded. This amount decreases when the sales revenue collected during the period is more than recorded.

By recognizing the changes in the account balance, the model adjusts for differences between the income statement’s accrual-based accounting of sales revenues and the actual cash collections for sales.

The Accounts Receivable Investments figure for each period is the difference between the Accounts Receivable balance at the end of the previous period and the balance at the end of the current period. For example, the formula for the first period is

=C44 – B44

The formula for the second period is

=D44 – C44

and so on.