Part three of FaBEducation.com's Financial Statements presentation on their active learning programme in business finance for non-financial managers and entrepreneurs

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Financial statements
③ Cash Flow
of ⑤

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Statement of
cash flows
From Operating Activities
From Investing Activities
From Financing Activities
But making sure that the business
has enough money to meet its
obligations is the key focus for
managers and entrepreneurs so
we simply focus on the overall
cash movements and position.
Cash flow - 1
Examining the ways a business raises and
uses funds is also revealing so we also have
a “third” financial statement

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Cash flow - 2
The main sources of funding to
businesses
Share capital
Retained profits (once it is in a position to
generate them)
Grants
Loans – banks, friends, family
Leases on vehicles and equipment
Credit from suppliers

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Cash flow - 3
A typical operating cash flow cycle for an inventory based business
buying and selling on credit
Receive good for Inventory
Pay supplier
(45 days?) Sell goods (Within 60 days?)
Cash
Receive payment for goods (Within
45 days of the sale?)
Overheads payments (Daily, weekly , monthly)
And you will have non-operating cash flows from capital receipts (share capital and loans) and
capital expenditure (purchase of fixed assets, taxes and loan principal repaying loan principal)