CTL: Analyzing Your Company’s Cash Flow Statement

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💡 New here? Start with What is a Statement of Cash Flow?

‍Before diving into cash flow analysis, make sure you understand how the Statement of Cash Flow is structured.
Read What is the Statement of Cash Flows?

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Calculating Statement of Cash Flows

Step-by-Step Instructions

Step 1: Gather Your Company’s Financial Statements

To calculate the SCF, you will need:‍

• Income Statement – To find Net Income and Depreciation
• Balance Sheet – To track changes in Receivables, Payables, Inventory, and Fixed Assets

You can get these reports from:

• The Visual Finance App
• Your company’s latest annual report

‍Step 2: Calculate the Statement of Cash Flow

Now, use the calculator below to manually calculate the SCF for your company:

1. Operating Activities

Start with Net Income from the Income Statement and adjust for:

1.1 Non-Cash Adjustments

• Depreciation & Amortization → Add back (non-cash expense)
• Stock-based compensation → Add back (if applicable)
• Deferred taxes → Adjust if applicable

1.2 Changes in Working Capital

Compare current vs. previous Balance Sheet

• ‍Add/Subtract a decrease/increase in receivables → an increase means there is more cash tied up in stock.‍
• Subtract/Add a decrease/increase in payables →  an increase means more cash is retained)

2. Investing Activities

Look at changes in Fixed Assets (e.g. PP&E):

• Buying new assets → Subtract (cash outflow)
• Selling assets → Add (cash inflow)

3. Financing Activities

Look at how the company is funding operations:

• Taking on new debt → Add (cash inflow)
• Paying off loans → Subtract (cash outflow)
• Issuing stock → Add (cash inflow)‍
• Paying dividends or Repurchase of Stock → Subtract

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Step 3: Answer These Key Questions

Once you’ve calculated the SCF, analyze the results:

Cash Flow from Operations

• Is the company generating positive cash from operations?
• Are non-cash adjustments significantly affecting cash flow?
• Are receivables, payables, or inventory affecting cash flow significantly?

Investing Activities

• Is the company reinvesting in growth, or selling off assets to generate cash?
• Has there been a significant change in capital expenditures?

Financing Activities

• Is the company borrowing more or paying off debt?
• Has it issued stock or paid out dividends?
• Are financing decisions aligned with business strategy?

Final Thought

This exercise helps you see how cash actually moves through a business—not just profits on paper. By calculating your company’s SCF, you’ll gain insights into how it funds operations, manages liquidity, and invests in growth.

The more you practice, the easier it becomes to spot cash flow risks and opportunities in real-world financial statements.

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