Cash Flow Statement Generator

What is a cash flow statement and how is it used?

A Statement of Cash Flows — required under AASB 107 for Australian reporting entities — shows how cash moves in and out of a business over a reporting period. Unlike the profit and loss statement, which uses accrual accounting and recognises revenue and expenses when earned or incurred, the cash flow statement reflects actual cash receipts and payments. A business can report a strong net profit while experiencing a cash crisis — the cash flow statement is what reveals that disconnect.

The statement is divided into three sections: Operating Activities (cash generated from the core business), Investing Activities (cash used to buy or sell long-term assets and investments), and Financing Activities (cash flows from borrowings, loan repayments, equity contributions, and dividends). Analysts, lenders, and directors use each section to assess whether the business generates self-sustaining cash from operations, or relies on external financing and asset sales to fund its day-to-day activities.

This generator uses the indirect method, which is the more common approach in practice. It starts with net profit from the P&L and adjusts for non-cash items (depreciation, amortisation, impairment) and changes in working capital (movements in receivables, payables, and inventory) to arrive at net cash from operating activities. The direct method — showing gross cash receipts and payments — is also permissible under AASB 107 and is preferred by the standard, but it requires more detailed transaction-level data.

How to use this generator

1. Enter your net profit for the period from your P&L statement.
2. Add non-cash adjustments: depreciation, amortisation, and any non-cash provisions or impairments charged during the period.
3. Enter working capital movements: an increase in receivables is a cash outflow (you earned revenue but haven't collected it); an increase in payables is a cash inflow (you incurred costs but haven't paid them). Then add investing and financing flows.
4. Review the net movement in cash and confirm it reconciles to the change in your bank balance between the opening and closing dates. Download as PDF.

How does the cash flow statement differ from the P&L?

The P&L records revenue when earned and expenses when incurred — regardless of when cash changes hands. The cash flow statement records only actual cash movements. The most common differences arise from: debtors (revenue recognised on the P&L but not yet collected as cash), creditors (expenses recognised on the P&L but not yet paid), depreciation (a non-cash expense on the P&L with no cash impact), and capital expenditure (a cash outflow that doesn't appear on the P&L but does appear as an investing activity). Understanding this distinction is critical for anyone interpreting financial statements — a profitable P&L combined with a negative operating cash flow is a serious warning sign.

Who is required to prepare a cash flow statement in Australia?

Under AASB 107, reporting entities are required to present a cash flow statement as part of a complete set of financial statements. This includes public companies, large proprietary companies (as defined under the Corporations Act 2001), not-for-profit entities required to prepare general purpose financial statements, and entities required to report under ASIC class orders. Small proprietary companies and sole traders are not legally required to prepare a cash flow statement, but lenders, investors, and accountants will commonly request one as part of any significant financial assessment.

How does accounts payable affect the cash flow statement?

Under the indirect method, an increase in accounts payable during the period is added back to net profit as a positive working capital adjustment — it means the business received goods or services and recognised an expense, but has not yet paid out cash. If your AP process is slow or invoices are not being captured promptly at period-end, your AP balance will be understated, which understates this positive adjustment and makes operating cash flow look weaker than it actually is. Accurate, timely AP processing is therefore not just an operational efficiency — it directly affects the integrity of your financial statements.