Understanding Cash Flow Analysis

Cash flow represents the net amount of cash moving in and out of a business during a specific period. Positive cash flow indicates that a company's liquid assets are increasing, while negative cash flow signals that cash reserves are depleting.

Step-by-Step Cash Flow Calculation in Excel

  1. Convert Statements to Excel: Use StatementPro to convert your monthly PDF statements into Excel workbooks.
  2. Sum Total Cash Inflows: Use =SUM(Credit_Column) to calculate total revenue deposits.
  3. Sum Total Cash Outflows: Use =SUM(Debit_Column) to calculate total operational withdrawals.
  4. Determine Net Cash Flow: Subtract total outflows from total inflows: 
    Net Cash Flow = Total Credits - Total Debits
  5. Track Monthly Burn Rate: Divide total monthly cash outflows by operational days to determine your daily cash burn rate.