A cash flow statement is a report that analyzes the financial movements that affect cash flow.
Cash flow is classified in the following ways:
To create a cash flow statement, we have to find every G/L account that affects the accounts that represent cash assets. In order to be successful at this, we have to team up with an accountant who can help us find and classify these accounts. When the total cash flow in this statement equals the net change of all cash assets then we've successfully found all the accounts.
In the next exercise, we will create a high-level cash flow statement using the more popular indirect method.
We start to create our cash flow statement by cloning the balance statement that we created in Exercise 13.2 and then go through the following steps:
only({1<[Account - Report]={'CashFlow'}>} [Account - Order])
sum({$<[Account - Report]={'CashFlow'},[AsOf Months Ago]={0}>} [GJ Amount] * [Account - Factor])
sum({$<[Account - Report]={'CashFlow'},[AsOf Months Ago]={0}>} [GJ Amount] * [Account - Factor]) / sum({$<[Account - Report]={'CashFlow'},[Account - Concept]={'Total Cash Flow'},[AsOf Months Ago]={0}>} Total [GJ Amount] * [Account - Factor])
[Account - Report]={'CashFlow'}
.The magic we do to create this report is in the financial report metadata that we reviewed earlier in this chapter. We use the Factor field the following table to add or subtract amounts as defined by the accountant. This method of report making is not always easy to grasp at first, so we should take our time to explore and experiment with the metadata.
The most important analysis introduced by the user story in the beginning of the section is to see what percentage of cash is received or spent within each group of activities. The cash flow statement looks distinct for different businesses during each stage in their lives. A start-up will not have much cash flow in operations, but it will have a lot of investment and financing activities. A mature company will have a more balanced cash flow with the greater amount classified as operations. A simple bar chart to that compares these three principal activities over time would be the optimal visualization.