Answer to Question #198760 in Accounting for Haley Parker

Question #198760

create a cash flow statement assuming that the coronavirus will close all of nathan’s restaurants, and revenues falls to zero.


1
Expert's answer
2021-05-27T11:02:10-0400

A cash flow statement, also known as cash flow, helps to see how much the business is earning, where the money is spent; track the structure of income and expenses in the format: came, left, left.


How detailed to build a report depends on the structure of the business and your request: if you conduct several types of activities - in the context of each business, several outlets - compile a report for each and for the business as a whole.


A cash flow statement is about analysis for a period - the past month. If you want to plan ahead - calculate the income and expenditure of money for the year with a breakdown by quarters, months - this is already a cash flow budget.


To plan the movement of money in the short term: day, week, month - a detailed payment calendar is suitable, in it you can see to whom, when and for what you will pay.


How to maintain a payment calendar


Actual indicators on payments from the payment calendar are included in the DDS in an enlarged form, by article, without detailing payments, and at the end of the period, an analysis can be carried out.


How to work with the report

To build a report, you need to have data for its preparation. As a standard, they take amounts from bank statements, checks, receipts. If some records are only in your notebook and the accountant did not take them into account, the report will be incomplete.


The report consists of three sections or areas of activity - operating, investment, financial. The inflow and outflow of money in these directions must be separated.


Operations - your main income-generating activity: payments from customers. Basic expenses. Shows whether there is enough income from operating activities to repay loans, pay dividends, invest in new areas without attracting loans, financial assistance, etc.

Investment activity is your investment in projects, developments, and resources that will bring profit and benefits for the business not immediately, but in the future. For example, purchase or repair of equipment, purchase, and revision of a CRM, website, construction, or equipment of new warehouses.

Financial activity is received and repaid loans, credits, including payment of interest. This includes bank loans and received grants, and financial assistance from counterparties, the owner's contributions to the business, and other raised money. Paying taxes can also be included here.


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS