Income Statement Flow Chart

A cash flow statement abbreviated as cfs is one of the main financial statements out of three the other two being the income statement and balance sheet to gauge a business s financial strength when the cash flow is strong it signifies that a company is in a good position to expand the business.

Income statement flow chart. Note that some steps are repeated more than once during a period. The cash flow statement or statement of cash flows summarizes a company s inflow and outflow of cash meaning where a business s money came from cash receipts and where it went cash paid by cash we mean both physical currency and money in a checking account. Obviously business transactions occur and numerous journal entries are recording during one. Here is an accounting cycle flow chart.

The balance sheet income statement and cash flow statement. The preparation of a company s cash flow statement utilizes data from both its income statement and its balance sheet. As you can see the cycle keeps revolving every period. At the bottom of our cash flow statement we see our total cash flow for the month.

After this cycle is complete it starts over at the beginning. Even though our net income listed at the top of the cash flow statement and taken from our income statement was 60 000 we only received 42 500. As with the income statement this gives alice a clearer and more immediate view of the largest uses of her cash figure 3 14 alice s common size cash flow statement for the year 2009 and figure 3 15 pie chart of alice s common size cash flow statement. Accounting cycle flow chart.

That s 42 500 we can spend right now if need be. The cash flow statement is a standard financial statement used along with the balance sheet and income statement. The second worksheet shown on the right is a multi step income statement that calculates gross profit and operating income. An understanding of the linkages between the cash flow statement income statement and balance sheet is useful for understanding a company s financial health.