Guide: How to Calculate Net Cash Flow in 4 Easy Steps
By: ActionCOACH
Date: 12 / 08 / 2015
Date: 12 / 08 / 2015
Net cash flow is the amount of money received and used in a business. Before you get your small business on the road, you will need to know how to calculate net cash flow. The cash flows are divided into three categories, operational, financial, and investment.
Operational activities are the goods and services a business delivers. The cash flow will help get an estimate regarding the amount of money, which is used while the goods and services are being delivered. In order to calculate the operational activities cash flow, there are three points to keep in mind.
Just like operational activities, financial actives are also recorded. The amount of cash generated are the financials, this amount is generated through sales, stocks, bonds, or other sources. There are two important points to remember,
This is to determine the total amount made by investments. Keep in mind,
After all three categories are totaled separately, combine the three totals in to one, that amount the ending balance is. This helps you generate an idea of the amount of money that is generated over a certain period. The following is an example:
Remember, you can use either the direct or indirect method to calculate net cash flow, both are considered accurate.
About ActionCOACH
Brad Sugars founded the brand Action International in 1993 when he realized there was a disconnect between business advice and implementation. The answer was Action! Brad Sugars created a business coaching company so that business owners throughout the world can realize their goals in business. Today the company is known as ActionCOACH. To learn more about business, visit Brad Sugars Review blog!