Pro Forma Cash Flow Template

Pro Forma Cash Flow

Pro Forma Cash Flow Template

A Cash Flow statement, or if you like a Statement of Cash flows is a rather simple Pro Forma Cash flow template that tells you much income (both money on hand and in the bank) your business has, and how much you have spent, and what for.

By using a Pro Forma Cash flow template, you can see instantly the general health of your business, how much money you have on hand, and how much money you have spent.

Pro Forma Cash Flow Template excel and Pro Forma Cash Flow Template spreadsheet formats are readily available for free download.

How to use a Pro Forma Cash Flow Template excel

  • First download it from the Pro Forma Website

  • Next, fill in the cash at the beginning of the reporting period.

For example, if you had $75,000 cash on December 31, for the year 2020 you would begin by putting the $75,000 balance down.

  • Under operations, begin with cash receipts from customers.

These would be the total amount you received from customers from all sales. Let’s say for sake of argument, this was $200,000. Then put that down under cash received.

Then you would subtract expenses.

For example, you may have paid $50,000 f0r inventory expenses. There’s a place to record that.

Next, there are the general operating expenses to subtract. Let’s say in this case, to keep the show open, pay the power and heating bills etc., you spent $25,000 on this.
Jot that down in the template.

You also have employee wages to consider. Let’ agree for the sake of an example, this amounts to $25,000 as well.

If you pay any interest on loans or equipment there is a place to plug this in, but for this example, we’ll assume this number is zero.

Finally, plug in your business taxes, which in this case we’ll assume was $40,000.

In total, the Pro Forma Cash Flow Template spreadsheet will calculate everything you have inputted, which in this case, would leave the net cash flow from operations at $60,000.

It is important to understand that you can do a cash flow statement for a week, a month, a year or a decade. As long as the data you input matches one another then the template will work.

However, you can’t mix and match. If you count the total money you get coming in every month, but you wait till three months to determine what your inventory expenses are, the figures won’t add up.

There’s the old computer adage, garbage in, garbage out. the more precise your data is, the better your cash flow statement will be useful.

The basic operating expenses and cash flow may be all you need for a small business, but larger businesses often demand more.

Investing activities

Cash flow spreadsheets enable larger companies to record their activities besides general sales. For example, if a construction contractor has three cranes for construction and then decides that in the future they would subcontract out all high-crane work, then there is no need to keep and maintain the company’s cranes. Those three cranes may sell on the market for close to a million dollars.

This would be inputted as a positive under the sale of property and equipment. At the same time, a construction company that just got a huge contract to construct an office tower may find itself investing upwards of $500,000 or more on new equipment.

The logical place to input the cash paid for the new equipment would be under cash paid for the purchase of property and investments.

At the same time, a new subcontractor comes to the company and says, “we would like to help in order to do your job. We need $100,000 worth of equipment. How about your company loaning us the money.” If it’s a good deal, the construction company might say yes. They would record this amount on the cash flow statement as an investment or loan.

Financing activities

Finally, a larger company may take in a lot of cash to operate through the use of selling stock. Both cash received from issuing stock as well as cash spent on both dividends and stock buybacks would be recorded in the financing section.

Not all the same

It is important to recognize that not all cash flow statements are the same. For example, in states that charge tax to businesses as well as Federal Income tax, the cash flow category may have two inputs for taxes. Federal and State.

Some cash flow templates let you change the language of the wording, some do not.
In general, the larger and more complicated the business, the more complicated the cash flow template may be.

But regardless of whether a business is small or takes in millions each year, they are a valuable snapshot of how the business is doing.