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How do you prepare a cash-flow statement?

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Wiki User
2007-08-10 17:51:37

A cash flow statement is basically a statement that explains how

the cash will be flowing in to a company. For example considering

construction industry the initial investment will be done by the

contractor to begin with the project. As project progresses the

number of activities that he will be doing in parallel will be

more. Hence if a project is having a duration of a year or two,

then the month wise amount spending for the activities to be

carried out during that month has to be calculated over the entire

period of the project. The cash flow for a typical construction

industry or any other industry will be a S Curve. A S-Curve

distributed evenly over the period of the project is preferable.

Now in order to map the progress of the actual work

as against initial cash flow, just super pose this on to the

original S-Curve. If the actual curve is below the original S-Curve

then it indicates that the progress of work is below the original,

and if it is above then it denotes that the progress is good and

healthy.


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