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Creating Cash Flow Statement by Indirect Method II | Chandoo.org - Learn Microsoft Excel Online
Recap
To get the cash flow statement, we simply needed to 1. Take two years balance sheet 1. Ensure that you have the correct numbers in Excel: Build checks, Assets = Liabilities 2. Categorize the elements of balance sheet in Operating, Investing and Financing Activities. Remember simple rules, while categorizing: 1. You would find the Financing Activities on the liabilities side (Typically Debt and Equity) 2. Anything current in nature would typically be Operating! 3. Investing mostly would be on the assets side of the business 3. Find the differences in liabilities and assets 1. Remember: Increase in Liabilities increases your cash and increase in assets decreases it 4. Take the differences of all assets and liabilities and exclude Cash (which is part of your current asset. 1. This remainder should define your cash generated 5. Try to match some of the differences from P&L 1. Difference in retained earnings should be derivable from Profit After Tax (after adjusting for dividends) 2. Difference in Accumulated Balance Sheet should be depreciation
Step I: Taking the Balance Sheet and ensuring that the Assets = Liabilities
We had got the balance sheet last time and ensured that the Assets and liabilities are equal. This is a simple step You only need to make sure that you can copy the right numbers from the S1 filing! You can get this template from the last post
Step 2: Categorizing the items in Operating (o), Investing (i) and financing (f)
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Creating Cash Flow Statement by Indirect Method II | Chandoo.org - Learn Microsoft Excel Online
Again, I told you the broad rules Find the Financing Activities on the liabilities side (Typically Debt and Equity), Anything current in nature is Operating and Investing mostly would be on the assets side of the business. You can get the complete template of categorization from here.
Templates to download
I recommend that you try to create the cash flow statement by implementing the steps that I showed above. The excel sheets are available for your kind reference: Income Statement and Balance Sheet for FB Categorized Balance Sheet (Indicating Operating, Investing and Financing Cash items) Differences as Cash Final Cash Flow Statement For any queries regarding the cash impact or financial modelling, feel free to put the comments in the blog or write an email to paramdeep@edupristine.com
Announcement
We would be launching a new module in the financial modelling course, which would cover video tutorials on creating the financial modelling course. The module would have the following: 3 hours video sessions on creating the cash flow statement 10 step by step templates on creating the cash flow statements Coverage of companies across sectors and countries (Apple, Alibaba, Volkswagon, Google, etc.) Presentation and notes covering the concepts The cost of the module on creating the cash flow statement is USD 75. But we are offering it FREE for now. You can enroll for the combination of financial modelling and cash flow modelling
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Creating Cash Flow Statement by Indirect Method II | Chandoo.org - Learn Microsoft Excel Online
course at the old prices till 25 th of April, 2012. If you are planning to be a pro in financial modelling, I suggest that you dont waste any time to enroll for the course. PS: We would be giving access to the new module to all our old students.
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