Build a Cash Flow Statement From Scratch Using a Balance Sheet and Income Statement

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Create a Cash Flow Statement from scratch on Excel using a balance sheet and income statement.
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🆓 DOWNLOAD Free Excel file for this video:
view.flodesk.com/pages/62da58...
In this lesson you will learn to build a cash flow statement from scratch using a balance sheet and an income statement. This is one of the most common interview questions in accounting or finance.
First, we'll explain the cash flow statement looking at the 3 main sections: he cash flow from operating activities, investing activities, and financing activities. We'll also explain the 2 main methods to calculate cash flow which are the direct method, and the indirect method.
Then, using the both the income statement and balance sheet, we'll calculate all the relevant line items to reach net change in cash. Finally, we'll link the ending cash amount to the most recent balance sheet to match assets and liabilities plus shareholders' equity.
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Chapters:
0:00 - The Cash Flow Statement
1:01 - Operating Activities
7:10 - Investing Activities
8:36 - Financing Activities
11:50 - Net Change in Cash & Formatting
Disclaimer: I may receive a small commission on some of the links provided at no extra cost to you.

Опубликовано:

25 июл 2024

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Комментарии : 126

@KenjiExplains 2 года назад

👉 Get 25% OFF Financial Edge using code KENJI25: bit.ly/3Lla95f

@antonmursid3505 Год назад

Antonmursid🙏🙏🙏🙏🙏✌🇲🇨🇲🇨🇲🇨🇲🇨🇲🇨✌💝👌🙏

@KenjiExplains 2 года назад

🚨 Correction: short-term debt should not be accounted for under working capital. It should go under financing activities. Cheers!

@TusharKumar-jb6vp Год назад

Yes I was about to correct it but then I saw your comment

@tuhinkumar2 Год назад

@kenji explains What about the taxes which needs to be deducted under the operating cash flows?

@jeimmylorenasolerlopez1312 5 месяцев назад

Great video! I have two questions. How do we accounted for the short term lease liability? And how do we accounted for a ROU operating lease assets?

@SurgeEquityResearch 5 месяцев назад

@@jeimmylorenasolerlopez1312Your question makes no sense

@danielmwabila8064 2 года назад

Kenji Explains, also known as every business student's best friend! 😁😃 Truly appreciate the endless value you keep providing!

@KenjiExplains 2 года назад

Cheers Daniel thank you for watching the videos! Hope all is well man :)

@PraveenKumar-ei6qr Год назад

This is good. I did my accounting class a year ago and already forgot some basics. This reminded me a lot. Thank you.

@tanjasahaidak1617 4 месяца назад

I love the posibility to load the document and work with you! Thanks!

@yudispace Год назад

Thanks Kenji for sharing. Your explanation is very detailed

@ethaneshelman5494 4 месяца назад

This was super helpful. Thank you Kenji!!

@Jesstries13 Год назад

Amazing. Thank you so much. I have a horrible corporate finance professor and this channel is literally how I am getting through my masters course. 🙌🏻

@KenjiExplains Год назад

Happy to help!

@raihandawood987 Год назад

Simply superb. You explained the toughest thing in a very simpler form. Hats off Sir !!

@anv.4614 2 года назад

Dear Kenji, Thank you for great lesson.

@gehadsayed7157 10 месяцев назад

Thank you for simplifying the Cash flow statement

@arunkumarilangovan1707 Год назад

VERY USEFUL CONTENT. MANY OF MY DOUBTS WERE CLEARED IN THIS VIDEO. THANK YOU.

@lucabenattar7365 2 года назад

Congrats Kenji ! The quality of your videos is amazing !

@KenjiExplains 2 года назад

Thanks so much for the comment Luca, really appreciate it!

@roseb.5367 2 месяца назад

Your voice forces my nerves to calm down and just listen. This was so beneficial for me. We are working on cash flow in my Finance class. Thank you

@daniels5166 Год назад

Thank you for the valuable content

@andymarci6766 2 года назад

We were deserving this type of video! Thanks professor Kenji!

@KenjiExplains 2 года назад

Hope you enjoyed it!

@vivekiv6696 2 года назад

your presentation is good. Thank you

@Saud.S Год назад

Thank you very much, this helped me alot.

@maurernicolas7829 Год назад

Thank you for uploading such good content

@galojara3207 3 месяца назад

Thanks so much, Kenji

@philevans906 11 месяцев назад

It does what it says on the tin; Kenji does, indeed, explain. 👏

@xxflow7453 Месяц назад

For those in need: that 384 change in accumulated other comprehensive income (AOCI) is the difference between the IS D&A and BS implied D&A; Therefore, assuming that there is no amortisation, the income statement D&A includes a non-cash adjustment that is in fact an unrealised revaluation (likely of PPE) which is reflected in AOCI. The cash-flow statement CFFO and CFFI should be modified to reflect this as follows - CFFO: D&A is 360, CFFI: Capex is -26 (calculated as sum of change in Gross PPE -410 and change in AOCI +384). You are welcome :)

@dianehaen2407 Год назад

amazing docs and video

@Fantasial 8 месяцев назад

it was very solid good explanation thank you

@mariab4010 Год назад

AMAZING VIDEO HONESTLY I DON´T HAVE WORDS

@benwang7057 Год назад

This video is wonderful

@kayvanshah5216 2 месяца назад

Thank you sir!!!

@camlex6310 2 года назад

Really easy to understand thanks!!

@KenjiExplains 2 года назад

Glad to hear that!

@vinayaktiwari7702 Месяц назад

kudos very well explained

@abdallahlakkis449 2 года назад

You're such a king honestly. Thanks a lot

@KenjiExplains 2 года назад

Happy to help!

@qaniacademy2006 Год назад

thanks of nice Explanation

@ShawnWi Год назад

Working on my M.S. in Finance and I zero background working in accounting or finance...(I work in insurance) this video is a great explanation for something that is difficult to understand from just reading the textbook

@andreugiro2807 2 года назад

Thank you my friend! Keep doing this interesting videos!😁

@KenjiExplains 2 года назад

Thanks for the visit!

@ettoremurano888 Год назад

Great video! It would be great if you made one on how to restructure financial statements, don’t you think?

@jamlawas6924 9 месяцев назад

Hi Kenji, thank you for this video. May I know if SG&A and other operating expenses should be included in Cash flow under Operating activities? Should I treat them the same as depreciation and not get the difference? Thanks

@solomonbhandari-young4154 2 года назад

Amazing

@reebazm5028 6 месяцев назад

Hi Kenji. Its really fabulous to see this video. Request to show direct method with the same data.

@jackmedin6768 Год назад

Most helpful RU-vid channel

@soumyajain7863 2 года назад

Hi Kenji, I love your content as it provides exact information about finance and its working. Just wanted to ask any videos on DCF modelling from scratch ?

@KenjiExplains 2 года назад

Thank you, appreciate your support! No unfortunately don't have those as they're very lengthy (at least to do well). The only place we have those available is in our course: learn.careerprinciples.com/courses/finance-valuation-course

@shivanshshukla5883 2 года назад

@@KenjiExplains how long is your course hours?

@michaelquach7046 2 года назад

Another solid exercise anyone can do to prepare for finance interviews

@KenjiExplains 2 года назад

Thanks for the help!

@piyushsharma2829 2 года назад

Hey kenji, you explain very clearly and your content is really good. I have theoretical knowledge about financial modelling and valuations (but I don't understand when it comes to practically making Models) can you suggest best Books to learn about financial modelling, Valuations(Basic to advance) and Finance (Investment Banking related).

@andresfernandezdelvalle803 Год назад

Great video, I just can't understand why you add in the depreciation to the operating cash flow? Cheers!

@ronaldpalmgren9478 Год назад

I very much enjoyed your video.I am creating a month to month forecast but do not know how to treat downpayment from customers and downpayments to vendors in the statement of cash flows.Can You advise? thanks

@basantjangir1 Год назад

Thanks @KenjiExplains this is a very useful video on cash flow statement

@ronaldroldancavero 2 года назад

Hi Kenji. I always watch your videos, thanks for explain really good. I'd like to know why you add short term debt in operating cash flow, I understood it was part of financing cash flow. Why it could be? thanks so much

@KenjiExplains 2 года назад

Yes you're completely right, it should not be under working capital. Sorry about that and thanks for pointing it out :)

@kriscahya 2 года назад

hi, kenji, how to make the Change in formula you make auto kinda to the right not in line the Change in Title thanks

@dakshithragupathi3992 5 месяцев назад

@kenji, Is the change in other current assets be +150, because the company gained cash from selling current assets from 1,650 to 1,500?

@MellowMelodiesGoa 4 месяца назад

I am not from Finance, but wanted to learn about DCF which requires deriving FCF, thanks.

@xmen123ify 11 месяцев назад

What about the sale of an asset loss or gain don’t you have to adjust it in the operating activities part of the cash flow ? And the sale will be adjusted in the investing part

@natesome 2 года назад

Question for You Kenji.... I noticed that you did not include the Net Income in your calculation for Change in Cash. Is that an error?

@TheSivaroshan 2 года назад

When you take the difference between share capital won’t be the divided paid be counted ? Why took it separately again as well ?

@nicolearaujo5590 Год назад

Hi Kenji. Can you do a Seidman Financial Model 13 weeks cash flow tutorial?

@mr.gk5 7 месяцев назад

How do you set up the check thing at the end of the balance sheet?

@shrijapathak4829 Год назад

I wanted to point out a couple of things. I might be completely wrong. Part of debt repaid is already subtracted in the income statement, so to account for that short-term debt repaid and portion of long-term debt repaid must be added back in CF from operations and subtracted back from financing activities to ensure there is no double substracting. Moreover, shouldn't the change in other assets be added/substracted from investing activities?

@retrobox4119 2 года назад

From where we can find the final excel file?

@karanarora8027 Год назад

hey i was analyzing a company's cash flow statement and the changes in current assets reported on cash flow statement does not correspond to the change in current assets on the balance sheet. how to go about this thing?

@pabloorellana6036 Год назад

Hi there Kenji , what could your recommend me (from your courses )… I’m civil engineer and for this 2023 year I would like to do like an investment for my company.. buying an excavator… so what could I do … like a project finance for the company trying to figure out my incomes and outcomes…? Thank you looking forward your reply

@sujinseo9545 2 года назад

Hi Kenji I,m really enjoying watching ur videos, the link for the excel file is for a chart,not for building an income statment

@KenjiExplains 2 года назад

Link updated sorry: view.flodesk.com/pages/62da585cc9d3abbafd6c44b5

@rossanaaquino9118 3 месяца назад

sir where will i place cash received from compensation income

@user-hq2lg5sh3x 2 года назад

Sir what is the monthly salary of investment banker

@alexshah7277 Год назад

Hello Kenji... I want to ask here... Now all business were done in online which is all transaction were paid via bank... Is it consider as cash flow?

@himanshujoshi4927 5 месяцев назад

Could you let how to match balance sheet tallying in Excel

@ChasingMyLiberty 2 года назад

Jedi Master Kenji teaches another lesson in the ways of the Force.

@KenjiExplains 2 года назад

hahah thank you!

@malikikram3643 10 месяцев назад

Sir if debenture is given in balance sheet how i understand that debenture or issued or redeem

@juandiegoforero3805 14 дней назад

I have a question if you start from the net income for the cash flow statement, shouldn’t you take away interests? and is not correctly taking into account the operational taxes, isn’t it?

@anant0089 4 дня назад

Hi pls help me I need to figure it out why increase in inventory in company balance sheet will go in Cash Flow only but not under purchases in Trading and P&L account and reduce net/gross profit accordingly ? Example company:

@leo2hari Год назад

have a question or confusion here, Is this the correct way to subtract the previous year's value from the current year's value? check WC heading , Accounts Receivable increased in 2021 then why would be figuring it out to be as negative change?

@sabazehrananji3406 8 месяцев назад

A question: why didn't we include accumulated depr in investing activies?

@hassanraza-vb5ss 11 месяцев назад

do we really need cash flow statements? i mean our system has all cash movements recorded and we have income statements, expense trends, capex, BS packs which automatically tells us all movements in cash + the ending balances. please answer my question cz i am really confused. thank you in advance :)

@jimmymaulanaramdani9967 10 месяцев назад

Thanks for explaining, Mr. Kenji. It makes me wanna know about you. Hope you're always fine. Can you tell me Which country do you come from?

@KenjiExplains 10 месяцев назад

Thanks for watching! From Spain (spanish father & japanese mother)

@hieuieu9194 2 года назад

Did you reduce form the balance statement and income statement?

@armitageshanks2499 2 года назад

Kenji, so do all cash flow statements show no original information? Everything in cash flow statement can be built from balance sheet and income statement?

@KenjiExplains 2 года назад

Yes! It shows the change which is kinda new information but the inputs are still all from BS and IS

@edsonmachel7516 2 года назад

Short-term debt is not a working capital item, net working capital refers to non - cash and non-debt items

@KenjiExplains 2 года назад

Yes completely right, added a correction on the comments. Thanks for pointing it out :)

@rimarima8926 7 месяцев назад

Hello sir, im really confused where to account contingency fund in cash flow it is separated account from cash in assets But in ledger you cannot account it anywhere.. So where does contingency fund go with?? The capital????

@justinseah4011 3 месяца назад

Noticed for the movement in PPE, this doesnt seem 100% correct because the movement may be due to a revaluation of properties. So there would be a need to split out the fair valuation appreciation portion (not to be included). Right?

@denvernazareth2778 3 месяца назад

The gross PPE is essentially the book value and does not account for depreciation/appreciation, therefore you can use it to identify whether capital expenditure has been increased or not. Using net PPE would be incorrect if you do not add back the depreciation

@cuaumuz 11 месяцев назад

Thank you very much for this very helpful video. I am going to save this because I know it will definitely come in handy again!

@godismyway7305 Год назад

Why we did not deduct Interest payment $289 in our Financing ? Subscribed, Thank you!

@KD_00001 10 месяцев назад

U can do it, if u r doing it u have to add back interest in operating activities

@bhaveshgoswami. 11 месяцев назад

I have a question here. Depreciation that we are adding back is 744 whereas the movement in Accumulated depreciation is 360. What could be the reason of difference? How our cash flow is tallying without considering this difference?

@KD_00001 10 месяцев назад

Yes i think u r correct. BS will tally as Cash figure in CFS is taken an hit from (744-360) depreciation and Cash figure in BS is just from CFS

@selenabui7957 9 месяцев назад

I downloaded Free Excel file but it can not be opened . Keep showing errors. Is it still available?

@ruthenianthruth 2 года назад

Kenji, may I ask why you ignored Accounts payable, Taxes payable and Other Current liabilities?

@ruthenianthruth 2 года назад

Sorry, I missed that you did it in Cashflow from operating activities (in Working capital). Thanx for a good video!

@thesenate8268 Год назад

download link doesn't work anymore :((

@ChasingMyLiberty 2 года назад

Interview? I have to build this for a job interview?

@KenjiExplains 2 года назад

lol it would be for a final round interview yeah haha (obviously not all companies do this specific case study though)

@samuelb6550 Год назад

If someone can help with the depreciation, i'd really appreciate. The cashflow uses 744 as depreciation and amortization whereas the Balance sheet shows 4800 and 5160. Where does the 744 come from?

@thesenate8268 Год назад

It comes from the income statement. Balance sheet only shows depreciation, not amortization. Income statement shows both, that's why.

@KD_00001 10 месяцев назад

I think it's a mistake, since in video cash balance is taken from CFS, Balance sheet is matching. Practically Cash Balance would be physically verified and same will be considered in BS. In this scenario, Closing cash is being affected by the difference in depreciation in Balance sheet and Income statement

@willzinner8813 2 года назад

First!

@KenjiExplains 2 года назад

lol

@Richard.bassan 2 года назад

The excel file is not the same used in the video

@KenjiExplains 2 года назад

view.flodesk.com/pages/62da585cc9d3abbafd6c44b5

@Fantatizee Год назад

But you're not teaching me how to make the template in the first placeT-T

@mohamedhabeshee5502 10 месяцев назад

Kenji you are great but very fast Man you need to slow down

@jonnyfavela1011 2 года назад

short term debt is not a working capital item

@KenjiExplains 2 года назад

Yes you're completely right, it should not be under working capital. Added a comment to correct that. Thanks for pointing it out :)

@ankit689 Год назад

Why to derive..can't you take an example as to how you arrived correctly!!!!

@ruchikabandara4010 6 месяцев назад

dont you need to concern on payment of tax in cash. You got net income after tax and interest and you didn't concern about the tax and interest payment in term of cash.

@user-bw5co8oo3g 10 месяцев назад

The Total of Change in Cash from Cash Flow Is Wrong It is been equal to 8145

@KD_00001 10 месяцев назад

CF from investing activity is negative 1k

@HUMAN-VERSION4 5 месяцев назад

Your soosmart and handsome

@0401412740 Год назад

It's easy to do, just the non-cash movements, like provisions, allowance for doubtful debts, depreciation, financing costs on lease liability need to be considered

@rimarima8926 7 месяцев назад