GLG Accounting | Comprehensive Cash Flow Statement Preparation

1. Let us talk about the basics first Cash Flow Statement Preparation is a process to document all cash related data. It is always good to start with; the basics so let us provide you with some basic information about the cash flow statement. By definition, We can define it as a financial report prepared to provide detailed information about the cash that moved inwards to or outwards from the respective company's account. This kind of report, suggest the company`s current position in terms of cash or assets equivalent to cash. So now, we know that the statement for cash flow is one kind of a financial statement just like,  The balance sheet  Income Statement  Statement of stockholders' equity Parts of a Cash Flow Statement

2. There is a standard procedure for Cash Flow Statement Preparation. Throughout the world, each cash flow statement comes with three mandatory or primary sections. The fourth section contains supplementary information, and it comes on the optional basis. While as we have mentioned in the primary sections, and it’s not possible to generate a report while lacking in any one of the three contents mentioned below, (1) Operating activities This section frames and declares all the inward or outward flow of cash that earned or consumed by a company during a defined period for maintaining a normal operation. Here the word, “operations” includes all those activities that a business performs to provide an end user with either a product or services. As an example, consider a manufacturer operating a plant to prepare soap. Whatever money it is consuming or losing in different disciplines like, purchasing of raw material, employees remunerations, electricity cost, maintenance cost, etc. will represent the outward flow under the category of Operating activities. While on the other hand, the revenue it will generate by selling soap in the market will represent the inward flow or earnings under the same category. (2) Investing Activities This section deals with the cash flow in term of sales or purchases made in terms of assets. As an example you can consider, land, equipment, marketable securities, loans received back or supplied payments made for acquisitions and cash earned through acquisition. It is the second primary section, which we take into consideration during the Cash Flow Statement Preparation (3) Financing activities This section includes information about the payments made or cash received through financial instruments. Few good examples of such instruments include bonds and shares. In terms of outflow, we can mention the dividends paid to shareholder What are the benefits? You cash flow statement provides you with comprehensive insights about your business. In most countries of the world, an entity engaged in business and some places, even the individuals are the law bound to maintain this report. In case if you are running a corporation then your shareholders have every right to ask you about the details of cash flow across the company`s treasure. It is good to hire professionals. It is not only good but an excellent thing to do. Cash Flow Statement Preparation services are vastly available in the market. A professional with a better understanding knowledge of the subject can come up with an inclusive and broad kind of report. Such a systematic and thorough report itself can provide you with a better understanding of the impact of each of your mode which on the business. Things to double check before hiring While outsourcing any financial services, you should prefer relevant experience. You should never hand over such a critical job to an inexperienced freelancer. Choosing professionals, oriented company will help you a lot in the course of your Cash Flow Statement Preparation. Address:400 Central Ave, Suite 340B, Northfield, IL 60093, USA Phone:(312) 754-9377

3. Referral: https://www.glgaccounting.com/cash-flow-analysis/