How to Interpret a Cash Flow Statement

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Interpret a cash flow statement by looking at the two columns that show the expenses for a business and the income. Use cash flow statements every month for a small business to determine where money is going with advice from a business professor in this free video on small business.

Part of the Video Series: How to Open a Small Business
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Video Transcript

Hi, my name is John Niemira. I want to talk to you about interpreting a cash flow statement for your business. A cash flow statement simplified, tells you about the, the income and the expenses for your business. Cash flow statement tells you where is your money going, where is it coming from, what are you selling and where is it going, what are you spending on, what are your expenses. To interpret a cash flow statement is usually broken down into two columns of expenses and income. What are we taking in, what are we charging for and then on the other side, what are paying for, what are our expenses, what are the total lap over a length of time? Most expense forms like that will be done on a monthly basis to show what's coming in for that month and what's going out for that month. And a budget setup, it could be a longer length of time; over a quarter, over an annual, over a three year or a five year period; depending on what you're looking for and what kind of information you, you're trying to pull from that statement. You want to see what are you spending, what are you making; what's the difference in the two, where is your money going to and where is your money coming from. If you need anymore information on this subject or any other subject in the business field, my email address is jniemira@gmail.com.

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