Cash Flow - Development

Hi All ,
I think Cash flow statement is a report a lot of users are looking for, I would like to develop it for the community. As accounts isn’t my strength I invite experts to build me a flow chart on drafting a cash flow statement.

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Hi… here my understanding about chasflow…

cash flow is :
Total Profit and Loss - xxxxxxxx
Asset:
COA of asset - xxxx
Total - xxxxx

Liabilities:
COA of liabilities - xxxx
Total - xxxx

Cash Change - xxxxx (it will be total Profit and Loss + Asset + Liabilities)
Opening balance - xxxx
Total - xxxx ( Beginingbalance + Cash Change)

As per IAS (International Accounting Standards) - 7 Cash flow format is as follows:

Net profit for the year

Adjustments:
Depreciation
Amortization of intangibles and other non current asset
Provision for doubtful debts
(Profit) / Loss on sale of fixed assets
Provision on employee’e end of service benefits
Operating profit before changes in working capital changes

Working capital changes:
Changes in Inventories
Changes in Trade receivables and other assets
Changes in related party balances
Changes in trade payables and accruals
Cash flow from/( used ) operating activities
Income tax paid
Employees end of service benefits paid
Net cash flow from (used) operating activities

Cash flow from investing activities
Purchase of Property and equipments
Purchase of intangible assets
Payment for Leasehold right over land
Proceeds on sale of fixed assets
Investment in subsidiaries
Net cash used in Investing activities

Cash flows from financing activities
Net addition to loans/ Repayment of loans
Dividend paid during the year
Net cash from financing activities

Net Increase /(decrease )in cash and cash equivalents
Cash and cash equivalents- beginning of year
Cash and cash equivalents- end of year

There are many more variables which i cant seem to remember now but this is the most standard format

Description:

  1. Under the “Adjustments” all non cash transactions, such as depreciation and provisions are added back adn any profit on sale of fixed assets is subtracted and loss added back. Operating profit before working capital changes in the total of net profit plus the adjustments.

  2. Under “Working Capital changes”, increase in inventory i.e difference between the closing inventory balance of prior year and this year, if its an increase it is subtracted as this shows cash has gone out to purchase the inventory. In receivables and other assets if its a decrease it is added as you received money due to which they decreased. We again take the closing balance of the last year and subtract it from this year’s balance. Changes in related party is the same thing, it is just transactions between related group companies. In trade payables, an increase is added and vice versa, as this shows cash has been retained rather than giving it out.

  3. Under “Cash flow from/( used ) operating activities” we add “Operating profit before changes in working capital changes” + “Working capital changes”

  4. Then we just deduct the tax paid, and gratuity paid then calculate the remainder and show it in “Net cash flow from (used) operating activities”

  5. Under “Cash flow from investing activities”, any activity that requires investment i.e cash outflow, is deducted for fixed assets and under “Proceeds on sale of fixed assets” total amount an asset is sold for is displayed. Under “Net cash used in Investing activities”, it is the total for this section only.

  6. Under “Cash flows from financing activities”, any addition to loan is treated as addition as cash increases and repayment as reduction. Dividend is also treated as a reduction. If shares are issued then cash is received which is treated as an addition. Under “Net cash from financing activities” we just calculate the total of this individual section.

  7. Under “Net Increase /(decrease )in cash and cash equivalents” we add “Net cash flow from (used) operating activities” with all the section totals. Then We take the total of closing cash+bank balance of last year and add the “Net Increase /(decrease )in cash and cash equivalents” which should give us the closing cash+bank balance which should be equal to the balance displayed in the balance sheet for cash and bank.

Hey guys

Thanks for the inputs, I shall get back when am done. With a bit of help from the internet i should be able to get a cash flow statement

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Hi Vivek,

Any news on your cash flow report? How you doing?

Thanks
Nathan

Hi @betabrain ,
I haven’t worked on it much after a point as the client who wanted it cancelled the project. But this is something definitely i am planning to finish on. I am a bit stuck up with work and waiting for a bit of time. I shall surely let you know ones I am done.

Hi vivek
is there any progress on the cash flow as i am looking for it ,please inform me if you have any progress we need it badly.
thanks

Sorry guys I haven’t been able to work on this yet. free time is scares. but I will work on it sooner or latter as there are few clients who want it.

@vivek atleast share what you started, maybe someone can help.

@vivek

is there any progress ?

@inventobd is already done Cash Flow is done! but still a PR https://github.com/frappe/erpnext/pull/4487 core group need to review it first.