What is a Cash Flow Statement Format?
A cash flow statement shows how cash moves in and out of a business across operating, investing, and financing activities over a set period, and is one of the three core financial statements alongside the balance sheet and income statement.
Cash Flow Statement Format
[Company Name] — Cash Flow Statement
For the period: [Start Date] to [End Date]
Cash Flow from Operating Activities
Net Profit: ₹[Amount]
Add: Depreciation: ₹[Amount]
Add/Less: Changes in Working Capital: ₹[Amount]
Net Cash from Operating Activities: ₹[Amount]
Cash Flow from Investing Activities
Purchase of Assets: ₹([Amount])
Sale of Assets: ₹[Amount]
Net Cash from Investing Activities: ₹[Amount]
Cash Flow from Financing Activities
Loan Proceeds: ₹[Amount]
Loan Repayments: ₹([Amount])
Dividends Paid: ₹([Amount])
Net Cash from Financing Activities: ₹[Amount]
Net Increase/Decrease in Cash: ₹[Amount]
Opening Cash Balance: ₹[Amount]
Closing Cash Balance: ₹[Amount]
Step-by-Step Guide to Writing a Cash Flow Statement
Writing a cash flow statement well comes down to following a clear process. Here's how to approach it:
Step 1: Define the Objective
Before building a cash flow statement, get clear on exactly what outcome it needs to support, so every section you include earns its place.
Step 2: List the Key Sections or Stages
Break cash flow statement down into its natural stages or categories. This structure is what makes it reusable, rather than something you have to rebuild from scratch each time.
Step 3: Add Specific, Actionable Fields
Within each section, list out the specific details, fields, or action items needed, rather than leaving broad, open-ended prompts. Specific fields are what make cash flow statement fast to fill in and consistent to use.
Step 4: Assign Ownership Where Relevant
If cash flow statement involves multiple people or steps over time, be clear about who owns each part. This is especially important for anything used across a team rather than by one person alone.
Step 5: Test It on a Real Case
Run cash flow statement against a real, current example before rolling it out more broadly. This is usually where you catch missing fields or unclear instructions.
Step 6: Refine and Roll Out
Adjust cash flow statement based on what you learn from the test run, then share it with the wider team along with a short note on when and how to use it.
Format tips
Small businesses typically use the indirect method, starting from net profit and adjusting for non-cash items, since it is easier to prepare directly from existing accounting records.
FAQs
What is the difference between a cash flow statement and a profit and loss statement?
Profit and loss shows accounting profitability including non-cash items; a cash flow statement shows the actual cash available, which is what determines whether a business can pay its bills.
Do small businesses in India need to prepare a cash flow statement?
It is mandatory for companies under the Companies Act (except certain small companies and OPCs), and it is good practice for every business regardless of legal requirement.
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