An annual statement is a must for any business.Ī cash flow statement can be used to assess the timing, amount and predictability of future cash flows and it can be used as the basis for budgeting.

For a small business, a cash flow statement should probably be prepared as frequently as possible. It traces the flow of funds (or working capital) into and out of your business during an accounting period. WHAT YOU SHOULD KNOW BEFORE GETTING STARTED įor your business, the cash flow statement may be the most important financial statement you prepare. The cash flow statement is a complex financial statement and by necessity, this Business Builder contains information on sophisticated accounting topics. Through the use of a worksheet, the Business Builder will guide you through the construction of a cash flow statement for your business. This Business Builder will introduce you to the cash flow statement and its importance for financial management. A cash flow statement can answer the questions, ' where did the money come from?' 'Where did it go?'_ WHAT TO EXPECT Washington State Department of Commerceĭigital Library > Acquiring and Managing Finances > Cash flow'How to Prepare a Cash Flow Statement'Ī cash flow statement is important to your business because it can be used to assess the timing, amount and predictability of future cash flows and it can be the basis for budgeting.Michigan Economic Development Corporation.

Cashflow statement by direct method