Tuesday, May 31, 2011

Personal Cash Flow Statement

In the corporate world, a cash flow statement is a document which comprehensively, states the receipt and payment of cash. A corporate cash flow statement usually comprises of what are known as a revenue-expenditure elements, indicating the inflow and outflow of cash. In such a business or corporate cash flow statement, the three principle elements: cash flow from operations, cash flow from investing activities and lastly, cash flow from financing activities are depicted. Problem is, you cannot follow the same format while making a personal statement. In such a context it is better to replace the first category with 'cash flow from personal income and expenditures' and the last category with 'cash flow from assets'. The following is an explanation as to how to prepare the statement and also, how to classify your expenditures and incomes in accordance with the said following categories.

It must be noted that you can prepare the cash flow for any given time period, which is also known as accounting period. It may be a day, week, month or even longer periods such as quarter (three months), 6 months and an entire year.

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