Classification and types of cash flows. Organization and management of cash flows from the financial activities of the company Cash flows from financial activities involve

Updated 07/02/2019 at 18:49 33,404 views

Company managers are interested in financial security and business stability, which is largely determined by the generated cash flow. Cash flow (“cash flow”) is the sum of receipts and payments for a certain period of time, which is divided into separate intervals.

Cash flows serve to ensure the functioning of the company in virtually all aspects. To achieve the required business goals and ensure stable growth, the financial manager needs to optimally organize cash flow management. For this purpose, it is convenient to classify cash flows into types.

Classification of cash flows into types

1. According to the direction of movement:

• Positive cash flow, the sum of cash receipts from all types of transactions (sometimes the term “cash inflow” is used).
• Negative cash flow, the amount of cash payments for all types of its operations (sometimes the term “cash outflow” is used).

The interconnection between these species is quite high. If one of these types of flows declines over a period of time, this will most likely entail a reduction in the second type. Therefore, in financial management these two types are considered as a complex management object.

2. By management levels: Central Federal District, projects, types of activities allows you to assess the bottlenecks of financial management and take timely measures:

• Cash flow of the company as a whole. This cash flow includes all other types and serves the business as a whole.
• Cash flow of individual structural divisions, centers financial responsibility(CFD) enterprises.
• Cash flow for individual transactions. This is the primary object of self-government.

Figure 1. Types of cash flows using the example of the software product “WA: Financier”: Consolidated cash flow statement according to IFRS standards.

3. By type of activity:

• Cash flow from current activities. Includes proceeds from sales of core activities, advances from customers, revenue from auxiliary activities and repayment of debts to suppliers, wages, tax payments to the budget fund.
• Cash flow from investing activities. For example, it includes cash flow associated with the acquisition of property or the sale of long-term assets.
• Cash flow by financial activities. Includes receipts of loans and borrowings, interest repayments, dividend payments, etc.

Figure 2. Types of cash flows using the example of the software product “WA: Financier”. Summary cash flow report.

4. In relation to the company:

• Internal cash flow. Cash flow within the company.
• External cash flow. The movement of funds between the company and its counterparties.

5. By calculation method:

• Cumulative cash flow is the entire amount of cash receipts or payments for a period of time at intervals.
• Net cash flow (NCF) is the difference between positive and negative cash flow for a period of time by intervals. NPV is a significant result of a business that determines its market value and financial position.

The formula for calculating NPV both for the company as a whole and for individual central federal districts:

The amount of net cash flow for the period = The amount of positive cash flow (cash receipts) for the period - The amount of negative cash flow (cash payments) for the period.

The NPV amount can be either positive or negative. This indicator affects the size monetary assets companies.

6. By level of sufficiency:

• Excess cash flow. In this case, revenues are significantly higher than the company's actual need to spend them. An indicator of redundancy is a high positive NPV value.
• Deficient cash flow. In this case, revenues are significantly lower than the company's actual need to spend them. At the same time, the amount of NPV may be positive, but it does not meet all the company’s needs for spending money. A negative NPV automatically means a deficit.

7. By level of balance:

• Balanced cash flow. It can be calculated both for the company as a whole, and for a separate central financial district, a separate operation.

Balance formula between individual types of cash flows for a period:

Amount of positive cash flow = Amount of negative cash flow + Anticipated increase in the amount of cash reserves.

• Unbalanced cash flow. In this case, equality is not ensured. Both deficit and excess total cash flow are unbalanced.

8. By time period:

• Short-term cash flow. The period from the beginning of cash receipts (or payments) to the end is no more than 1 year.
• Long-term cash flow. The period from the beginning of cash receipts (or payments) to the end is more than 1 year.

Typically, these types of cash flows are used for individual operations of the company: short-term cash flow is usually associated with current and partly financing activities, long-term cash flow is associated with investing and partly financing activities (for example, long-term loans and borrowings).

9. By importance in the formation financial results activities:

• Priority cash flow - generates a high level of net cash flow (or net profit). For example, proceeds from the sale of goods.
• Secondary cash flow - due to its functional focus or insignificant volume, does not have a significant impact on the formation of financial results. For example, issuing cash on account.

10. According to the time estimation method:

• Current cash flow is a comparable amount reduced by value to the current point in time.
• Future cash flow is a comparable amount reduced in value to a specific future point in time.

Typically, this classification is used when discounting.

11. According to international standards accounting, cash flows are also divided by type of economic activity:

• Cash flow from operating activities is characterized by payments to suppliers of raw materials; third party providers individual species services that support operational activities.
• Cash flow for investment activities is characterized by payments and receipts of funds that interact with the implementation of real and financial investment.
• Cash flow from financial activities is characterized by receipts and payments of funds that are associated with attracting equity or other capital, with the acquisition of long-term and short-term credit and loans.

Taking into account the above classification, various types of financial planning and cash flow management are organized. Thus, the classification of types of cash flows helps to carry out accounting, analysis and planning of cash flows in the company.

In general, cash flow - an analogue of the English cash flow (cash flow) is the result of the movement of funds of an enterprise for a given period of time, or it is the difference between the receipts of funds of the enterprise and their payments for a certain period.

Cash flow reflects the movement of funds, which in some cases are not taken into account when calculating profits: investment expenses, tax payments, taxes paid from profits; payments to repay the principal amount of the debt, etc.

For a deeper disclosure of the essence of cash flows and their effective management, it is necessary to classify them according to the following main characteristics.

The concept of “enterprise cash flow” is aggregated, including numerous types of these flows serving economic activities. In order to ensure effective targeted management of cash flows, they require a certain classification. This classification of cash flows is proposed to be carried out according to the following main characteristics:

1. Based on the scale of servicing the economic process, the following types of cash flows are distinguished:

Cash flow for the enterprise as a whole. This is the most aggregated type of cash flow, which accumulates all types of cash flows serving the economic process of the enterprise as a whole;
cash flow for individual structural divisions (responsibility centers) of the enterprise. Such differentiation of an enterprise's cash flow defines it as an independent object of management in the system of organizational and economic structure of the enterprise;
cash flow for individual business transactions. In the system of the economic process of an enterprise, this type of cash flow should be considered as the primary object of independent management.

2. By type of economic activity, in accordance with international accounting standards, the following types of cash flows are distinguished:

Cash flow from operating activities. It is characterized by cash payments to suppliers of raw materials and materials; to third-party providers of certain types of services that provide operational activities: wages to personnel involved in the operational process, as well as those managing this process; tax payments of the enterprise to budgets of all levels and to extra-budgetary funds; other payments related to the implementation of the operational process. At the same time, this type of cash flow reflects cash receipts from product buyers; from tax authorities in order to recalculate overpaid amounts and some other payments provided for by international accounting standards;
cash flow from investment activities. It characterizes payments and receipts of funds associated with the implementation of real and financial, sale of retiring fixed assets and, rotation of long-term investment portfolio and other similar cash flows serving the investment activities of the enterprise;
cash flow from financing activities. It characterizes the receipts and payments of funds associated with attracting additional share capital or share capital, obtaining long-term and short-term loans and borrowings, payment in cash of dividends and interest on deposits of owners and some other cash flows associated with the implementation of external financing of the economic activities of the enterprise.

3. Based on the direction of cash flow, there are two main types of cash flows:

Positive cash flow, characterizing the totality of cash flows to an enterprise from all types of business operations (the term “cash inflow” is used as an analogue of this term);
negative cash flow, characterizing the totality of cash payments by an enterprise in the process of carrying out all types of its business operations (the term “cash outflow” is used as an analogue of this term).

When characterizing these types of cash flows, you should pay attention to the high degree of their interrelation. The insufficiency of volumes in time of one of these flows causes a subsequent reduction in the volumes of another type of these flows. Therefore, in the enterprise’s cash flow management system, both of these types of cash flows represent a single (complex) object.

4. According to the volume calculation method, the following types of cash flows of an enterprise are distinguished:

Gross cash flow. It characterizes the entire totality of receipts or expenditures of funds in the period of time under consideration in the context of its individual intervals;
net cash flow. It characterizes the difference between positive and negative cash flows (between the receipt and expenditure of funds) in the period under consideration in the context of its individual intervals. Net cash flow is the most important result of the financial activity of an enterprise, largely determining the financial balance and the rate of its increase. market value.

The calculation of net cash flow for the enterprise as a whole, its individual structural divisions (responsibility centers), various types of business activities or individual business transactions is carried out using the following formula:

NDP = PDP-ODP,
Where:
NPV - the amount of net cash flow in the period under consideration;
PDP - the amount of positive cash flow (cash receipts) in the period under consideration;
ECF is the amount of negative cash flow (cash expenditure) in the period of time under consideration.

As can be seen from this formula, depending on the ratio of the volumes of positive and negative flows, the amount of net cash flow can be characterized by both positive and negative values, which determine the final result of the corresponding economic activity of the enterprise and ultimately influence the formation and dynamics of the size of the balance of its monetary assets .

5. Based on the level of volume sufficiency, the following types of cash flows of an enterprise are distinguished:

Excess cash flow. It characterizes a cash flow in which cash receipts significantly exceed the enterprise’s real need for targeted spending. Evidence of excess cash flow is a high positive value of net cash flow that is not used in the process of carrying out the economic activities of the enterprise;
deficient cash flow. It characterizes a cash flow in which cash receipts are significantly lower than the real needs of the enterprise for their targeted spending. Even if the amount of net cash flow is positive, it can be characterized as deficit if this amount does not meet the planned need for spending cash in all planned areas of the enterprise’s economic activity. A negative value of the amount of net cash flow automatically makes this flow scarce.

6. According to the time estimation method, the following types of cash flow are distinguished:

Real cash flow. It characterizes the cash flow of an enterprise as a single comparable value, reduced by value to the current point in time;
future cash flow. It characterizes the cash flow of an enterprise as a single comparable value, reduced by value to a specific upcoming point in time. The concept of future cash flow can also be used as its nominal identified value at a future point in time (or in the context of intervals of a future period), which serves as a basis for the purpose of bringing it to present value.

The types of cash flow of an enterprise under consideration reflect the content of the concept of assessing the value of money over time in relation to the business operations of the enterprise.

7. Based on the continuity of formation in the period under review, the following types of cash flows of an enterprise are distinguished:

Regular cash flow. It characterizes the flow of receipts or expenditures of funds for individual business transactions (cash flows of one type), which in the time period under consideration is carried out continuously at separate intervals of this period. Most types of cash flows generated by the operating activities of an enterprise are regular in nature: flows associated with servicing a financial loan in all its forms; cash flows ensuring the implementation of long-term real money, etc.;
discrete cash flow. It characterizes the receipt or expenditure of funds associated with the implementation of individual business transactions of the enterprise in the period of time under consideration. The nature of a discrete cash flow is a one-time expenditure of funds associated with the enterprise’s acquisition of an entire property complex; purchasing a franchising license; receipt financial resources in the form of gratuitous assistance, etc.

When considering these types of cash flows of an enterprise, you should pay attention to the fact that they differ only within a specific time interval. Given a certain minimum time interval, all cash flows of an enterprise can be considered discrete. And vice versa - within the life cycle of an enterprise, the predominant part of its cash flows is of a regular nature.

8. According to the stability of time intervals of formation, regular cash flows are characterized by the following types:

Regular cash flow with uniform Time intervals within the period under consideration. Such a cash flow of receipt or expenditure of funds is in the nature of an annuity;

Regular cash flow with uneven time intervals Within the period under review. An example of such a cash flow is a schedule of leasing payments for leased property with uneven time intervals agreed upon by the parties for their implementation throughout the leasing period of the asset.

The considered classification allows for more targeted accounting, analysis and planning of cash flows various types at the enterprise.

Cash flow management

1) in small enterprises, the chief accountant often combines the functions of the head of the financial and planning departments;
2) in the middle ones - accounting, financial planning and operational management departments are allocated;
3) in large companies, the structure of the financial service is significantly expanding - under the general leadership of the financial director are the accounting department, financial planning and operational management departments, as well as the analytical department, securities and currencies department.

As for the elements of the cash flow management system, these include financial methods and tools, regulatory, legal, information and software:

At each step, the cash flow value is characterized by:

An inflow equal to the amount of cash receipts (or results in value terms) at this step;
- outflow equal to payments at this step;
- balance (effect) equal to the difference between inflow and outflow.

Cash flow usually consists of flows from individual activities:

A) cash flow from operating activities;
b) cash flow from investment activities;
c) cash flow from financing activities.

Cash flow from operating activities includes cash receipts from the sale of goods, works and services, as well as advances from buyers and customers. Payments for raw materials, supplies, utility bills, wage payments, taxes and fees paid, etc. are shown as a cash outflow.

When investing activities, cash flows associated with the acquisition and sale of long-term use property, that is, fixed assets and intangible assets.

Financial activities involve inflows and outflows of funds for loans, borrowings, securities, etc.

Net cash flow is the sum of cash flows from operating, investing and financing activities. In other words, it is the difference between the sum of all cash receipts and the sum of all payments for the same period. It is the net cash flows of various periods that are discounted when assessing the effectiveness of the project.

At the initial stage of the project (investment period), cash flows, as a rule, turn out to be negative. This reflects the outflow of resources that occurs in connection with the creation of conditions for subsequent activities (for example, the acquisition of non-current assets and the formation of net income). After the end of the investment period and the beginning of the operating period associated with the start of operation of non-current assets, the amount of cash flow, as a rule, becomes positive.

Additional revenue from the sale of products, as well as additional production costs incurred during the implementation of the project, can be either positive or negative. Technically, the problem is to determine what the cumulative total of cash flows will be at the end of the established research horizon. In particular, it is fundamentally important whether it is positive.

Cash flows can be expressed in current, forecast and deflated prices. Current prices are prices without taking into account inflation. Forecast prices are those expected (taking into account inflation) at future calculation steps. Deflated are forecast prices that are reduced to the price level at a fixed point in time by dividing by the general underlying inflation index.

Along with cash flows, accumulated (cumulative) cash flow is also used when evaluating an investment project. Its characteristics are accumulated inflow, accumulated outflow and accumulated balance (cumulative effect). These indicators are determined at each step of the calculation period as the sum of the corresponding characteristics of the cash flow for this and all previous steps.

Free Cash Flow

Because this flow is generated by the firm's manufacturing or operating assets, it is often called cash flow from assets.

Since FCFF represents the cash flow generated from the operation of assets that is directed to investors, its value must be equal to the amount of payments, and vice versa.

From the above follows the well-known rule of identity, or balance of cash flows.

Cash flows from assets = Cash flows to creditors + Cash flows to owners

In formalized form, the identity of cash flows can be specified by the following equality:

FCFF = FCFE + FCFD

Where FCFD is cash flow to creditors; FCFE - cash flow to owners.

The FCFF value can be calculated in various ways. In the structure of this flow, three main elements can be distinguished:

After-tax flow from operating activities;
net investment in working capital;
net investment in fixed assets.

To determine the amount of net investment, we need a balance sheet, as well as a number of previously introduced concepts.

Recall that net investment in working capital in period t is equal to the value of WCR, i.e., the difference between current operating assets (minus short-term financial investments) and non-interest-bearing current liabilities (i.e., excluding short-term loans). Thus, the change in this value (?WCR) over period t will represent the amount of money invested in current activities. The following is a schematic presentation of the method for calculating the value of ?WCR.

Changes in working capital requirements = Changes in operating current assets (less short-term financial investments) - Changes in non-interest-bearing short-term liabilities (less short-term borrowings)

WCR = ? CA - ? C.L.

Similarly, net investment in long-term assets or capital expenditures is the money spent on acquiring new assets minus the funds received from selling old ones. Their value is equal to changes in net (?NFA) of real estate, equipment, etc. owned by the company, adjusted for .

Net investment (changes) in long-term assets (excluding long-term financial investments (?NFA) = Net long-term assets at the end of the period - Net long-term assets at the beginning of the period + Depreciation (DA)

Taking into account the above, the value of free cash flow will be

FCFF = EBIT - TAX + DA - ? NFA - ? WCR

As this expression implies, free cash flow is independent of the firm's financing structure. Unlike cash flow from operating activities (CFFO), which is determined directly or indirectly when developing the cash flow statement, interest on borrowings is not taken into account when calculating FCFF.

Cash flow to FCFD lenders consists of the following elements:

Interest received I;
net changes in short-term and long-term borrowings?D (the difference between repaid and new borrowings).

Thus,

FCFD = I - ?D.

In turn, cash flow to FCFE owners includes:

Dividends paid DIV;
net changes in equity (new issues minus repurchase of own shares, shares, shares), excluding retained earnings.

The FCFE value can be defined as

FCFE = DIV - ?E

It can be defined in another way:

FCFE = NP + DA - ? NFA - ? WCR+ ? D

The considered concepts of free cash flow from assets (FCFF), creditors (FCFD) and owners (FCFE) play important role when solving financial management problems.

Thus, cash flows from assets are the main object of investment analysis and when assessing the value of a company. The methodology for calculating this indicator clearly shows how management can increase the value of the company. The main levers for the growth of this indicator are:

Increasing operating profit EBIT by reducing costs and increasing revenue;
tax optimization;
minimizing operating and fixed assets through their more efficient use;
rationalization, etc.

The FCFD ratio is important for lenders. The FCFE value is of significant interest to the owners of the enterprise when assessing the effectiveness of the dividend policy, and can also be used in the analysis of investment projects financed from the owners’ funds.

Cash Flow

1. designing the cash flow cycle;
2. management of investments and working capital financing.

Today, one of the most important areas of financial management is ensuring liquidity, i.e. maintaining the organization’s ability to timely pay its expenses and debt obligations.

In a situation of economic stability, financial managers emphasize the primary importance of growth and profitability rather than liquidity. Even relatively weak managers can prosper due to overall economic recovery.

In an environment of uncertainty, the modern financial manager cannot be primarily concerned with growth and profitability, but must constantly consider the liquidity position. Today, when we have to deal with high interest rates, uncertainty of future government policies and instability of cash flows, the first thing we have to think about is survival and maintaining liquidity.

Liquidity and cash flow are closely related. But the concept of cash flow and fund flow have different origins and applications in finance and accounting. The concept of profitability, net working capital, net income and fund flow that accountants deal with is not based on the concept of cash flow. The focus of these concepts is the income and expenses recorded accounting, the meaning of which is to record expenses and income for certain periods. Financial managers, bankers, lenders and investors are more interested in current and future cash flows because they need to know what they have (will be able to have) to reinvest, pay dividends, interest and principal on loans.

Profitability measures the ratio of income to expenses over a given period, and therefore appears to be related to the concept of cash flow. But since revenues include credit sales and deferred receipts, and costs include accounts payable and debt, the concept of profitability is also tied to the concept of fund flows.

Net working capital is also tied to the concept of fund flow. This value is the difference between current assets and current liabilities at a certain point in time. Net working capital is a purely quantitative concept that does not contain information about the quality of current assets or liabilities. Since the concept of net working capital relates to current assets that will ultimately be converted into cash, there is a relationship between a company's net working capital and its cash flow. However, this relationship is not rigid and is a function of the time of sale of assets and receipt of money (therefore we talk about the movement, or flow, of funds). Only when we begin to take into account the time of turning assets into money or the time of payments for current liabilities can we talk about cash flow planning, since this concept is dynamic.

The calculation of the amount of net income and depreciation is usually related to the flow of funds, although in two cases this amount is equal to cash flow and is therefore related to the concept of cash flow. In the first case, we are talking about a business conducted only in cash. In the second - about a static company that operates only for money or on credit, which does not have any changes in balance sheet items. True, it is not easy to imagine the existence of such a company in the real world.

A financial manager involved in short-term planning and planning must understand the difference between cash flow (financial concept) and movement of funds (accounting concept). When planning short-term cash flows, the main analysis tool and framework for planning is the estimate (cash plan).

The main goals of cash flow planning are:

1. anticipate the organization’s future demand for funds;
2. assess the financial implications of this demand;
3. identify possible courses of action and choose the best one to satisfy the demand.

Some aspects of future operations can be predicted with great accuracy. This mainly relates to expenses. Payroll costs are fairly easy to predict. If you need to hire 10 more people, then the amount of additional costs can be estimated with a high degree of reliability. But the demand for the goods or services produced by the company and the impact of competitors on future revenues are not easy to predict, even approximately. To solve these difficult forecasting problems, a manager must develop scenarios such as "What will happen if...?" What happens if demand increases by 20%? What happens if it falls 5%? What happens if major competitors cut prices? The cash flow manager actually makes and tests hypotheses about what customers and competitors will do, converting those hypotheses into cash flow numbers.

Planning can begin once the various scenarios have been analyzed and cash flows have been assessed. Cash flow planning covers two main topics:

1. investment of free (excess) funds;
2. obtaining short-term loans to cover cash shortages.

Given the variety of instruments where excess funds can be invested, and the many sources of short-term loans, the manager has to solve the problem of choosing instruments that provide the greatest profit with minimal risk (for investing) and the lowest interest (for borrowing).

Operating Cash Flow

This block contains data related to the operating activities of the enterprise, i.e. everything that is directly related to the main activity, what is called production and sales. This data is entered into the form in monetary equivalent, there is no point in putting information on the physical volumes of production and sales on this form - this should be done in calculation blocks. There is no need to reflect anything other than money here. We place expenses on this form with a “-” sign, and receipts with a “+” sign. We try not to use any other operations with numbers other than addition, unless we calculate any indicators directly on this form, for example, in the case of using special tax regimes, you can calculate the amount of a single tax directly on this form, in one line.

What is usually classified as operating cash flows? We list them below:

Sales (revenue)
Advertising
Production costs
General business expenses (such as office rent, office supplies, etc.)
Salary (it is better to separate it from all costs)
Taxes (they can be divided into main parts - VAT, payroll taxes, etc.)
Interest (on loans received, on loans issued)

Let me remind you once again that here it makes sense to indicate only what affects the inflow or outflow of money. If the actions performed do not affect the company’s account balance, then they do not need to be indicated here. Based on CFO data, indicators such as EBIT, EBITDA, NP (NetProfit) are calculated. These indicators are needed in order to understand how much money can be “pulled out” from the business based on the results of each period. Or vice versa, add it. The latter is reflected in other parts of the cash flow model - in flows from financing and investing activities. The sum of all the elements in this block will be cash flow from operations, or CFO.

Cash flow planning

The purpose and role of operational ones is to determine the specific current financial and economic situation, namely: the sequence and timing of financial transactions with the most rational maneuvering of one’s own, attracted and borrowed financial resources in order to obtain the greatest economic effect.

Development of a plan for cash receipts and payments:

Influences the projected flows of payments in relation to credit institutions and investors;
allows you to control liquidity - avoid illiquidity or excessive liquidity;
initiates the development and implementation of appropriate organizational, financial and economic measures for balancing means of payment.

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Financial activities are activities that lead to changes in the organization’s own and borrowed capital as a result of raising funds, with the exception of accounts payable.

Cash flow analysis for financial activities is carried out in the FinEkAnalysis program in the Cash Flow Analysis block.

Cash flows from financing activities include:

• cash proceeds from the issue of shares and other equity instruments, as well as additional investments from owners;
• proceeds from the issue of bonds, loans, long-term and short-term loans;
• targeted funding and revenues;
• transfer of funds to repay the principal amount of debt on received loans and borrowings;
• funds used to repurchase own shares.

A firm is said to engage in financing activities if it receives resources from shareholders, returns resources to shareholders, borrows from creditors, and repays amounts received as loans.

This section of the report reflects the inflow and outflow of funds associated with the use of external financing in the form of loans and borrowings, as well as funds from the issue and other additional contributions from owners. Changes in equity considered as part of financing activities are usually represented by cash proceeds from the issue of shares, as well as share premium received. Change equity as a result of the net profit received (loss incurred) is not taken into account as part of financial activities, since expenses and income associated with the formation of the financial result of the organization’s activities are reflected in current activities.

Although, in accordance with the standards, the repayment of the principal amount of the loan provided is considered as part of cash flows from financing activities, the payment of interest on the loan may be included in the operating activities section, since the cost of paying interest on the provided borrowed funds participates in the formation of the financial result.

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    Such information is primary for the life of the company, so it is collected almost from the first day of operation of any organization, even if its management has never heard of such concepts as management accounting, cash gaps and financial puffiness. By the way, for this reason, the management accounting systems of cash flows available in companies... We will talk about how to properly build a system for collecting management information about cash flows. When building a management accounting system for cash flows, it is necessary to constantly... If the company is unprofitable, then for some time this will not threaten it in any way since its activities can be financed by accounts payable, i.e. the company will go into debt or

Cash flow concept

Cash flow from investing activities

Cash flow from operating activities

Cash flow from financing activities

Calculation of cash flows (table forms)

1. The concept of cash flow

Calculation of present value is made only on the basis of discounting cash flow (C ash flow ), which is generally understood as the circulation of money in a certain direction or type of activity, occurring continuously over time. It is advisable to understand the flow of money as the difference between the amounts of money entering the investor’s current account and cash register (money inflows), and the amounts leaving the current account and from the cash register (money outflows).

It is recommended to designate individual entrepreneur cash flows using CF ( t ), if they refer to a point in time t, or through CF(m), if they belong to m-th step. Project cash flows are classified depending on individual activities:

1. cash flow from investment activities CFAnd(t);

2. cash flow from operating activities CFFo(t);

3. cash flow from financing activities CFf(t).

Within each of these three types of activity during any m-th billing period (step) - month, quarter, year - cash flow is characterized by:

A)tributary P(m) funds equal to the amount of cash receipts to the current account and to the cash desk (cash inflows are determined by result implementation of IP in value terms at this step);

b)outflow O(m) funds equal to payments at this step;

c) balance (active balance, effect), equal to the difference between inflow and outflow.

2. Cash flow from investing activities

For cash flow from investment activities:

to outflows include:

capital investments,

commissioning costs,

project liquidation costs,

costs for taken awayreading working capital.

This also includes non-capitalized costs (payment of tax on the land plot used for the project, costs of constructing external infrastructure facilities). Information on investment costs must include information classified by type of cost. The distribution of investment costs over the construction period must be linked to the construction schedule;

to tributaries:

sale of assets during and at the end of the project (in this case it is necessary to take into account the payment of relevant taxes, which will be cash outflows),

revenues due to a decrease in working capital.

3. Cash flow from operating activities

For cash flow from operating activities:

to outflows include:

production costs;

to tributaries:

sales revenue,

other income, including income from funds invested in additional funds.

4. Cash flow from financing activities

To financial activities include transactions with funds external to the project, that is, arriving not at the expense of the project. They consist of the company’s own capital (share capital for a joint-stock company) and borrowed funds.

For cash flow from fifinancial activities:

to outflows include: costs for repayment and servicing of loans and debt securities issued by the enterprise (in full, regardless of whether they were included in inflows or in additional funds), as well as, if necessary, for the payment of dividends on shares;

to tributaries- investments of own capital and borrowed funds (subsidies, subsidies, borrowed funds, including through the issue of the enterprise’s own debt obligations.

3. Cash flow statement and its use for diagnosing an enterprise

In international practice, a cash flow report is an integral part of mandatory reporting. The main purpose of the cash flow statement is to provide stakeholders with information about the receipt and payment of cash from the enterprise for the reporting period. This information should help answer the following questions:

• whether the company receives enough funds to purchase fixed and current assets for the purpose of further growth;
• is additional funding required from external sources to ensure the necessary growth of the enterprise,
• whether the company has sufficient free cash to use it to pay off debt or invest in the production of new products;
• whether the enterprise issued securities and, if so, for what purposes the funds received were used.

The process of generating cash flow is shown in Fig. 3.1.

Rectangles indicate balance sheet items - assets and liabilities; the circles represent items on the income statement. Each of the rectangles represents a specific amount of assets and liabilities at a specific balance sheet date. If, for example, there is a decrease in the “debtors” item, this simultaneously increases the balance of funds in the company’s current account. An increase in the amount of depreciation means a decrease in the balance of the fixed assets account (net), but increases the amount of cash receipts from sales, and, consequently, the balance of funds in the current account of the enterprise.

Cash and easily marketable securities are the main element of this scheme. It is the pool into which money flows and the source from which money is spent for various needs. Let us specifically emphasize that the cash flow that passed through the enterprise during the reporting period is the difference between the sum of the balance sheet items “cash” and “marketable securities” at the beginning and end of the period. The main purpose of the statement of cash flows is not to estimate the amount of cash flow as the difference between the amount of the cash account and the item “easily marketable securities” at the end and beginning of the year. This can also be done using balance. The purpose of drawing up a cash flow report is to analyze the main directions of the inflow of money and the ways of its outflow from the enterprise.

Rice. 3.1. The cycle of material and cash flows within the enterprise

The cash flow statement typically consists of three parts, describing cash flows from operating, investing and financing activities.

The “operating activities” section reflects cash from operations that generated net profit through operating activities. Typical input cash flows are generated by the following transactions:

• sale of goods and provision of services,
• receiving interest payments from other organizations,
• receiving dividends on shares of other companies,

In addition, cash may come from other transactions, such as renting out premises or equipment.

Typical cash flow outputs come from

• payments to suppliers for TMS, energy, etc.
• payments to workers and employees,

• interest payments on bonds and bank loans .

The “investing activities” section reflects cash flows from operations related to the enterprise’s fixed assets, which are interpreted as long-term investments of the enterprise. Typical input streams result from the following operations:

• sale of fixed assets,
• sale of securities,
• receiving money from loans provided to other companies.

Typical output streams are a consequence

• acquisition of fixed assets,
• acquisition of securities of other enterprises and the state,
• lending money to other companies.

The “financial activities” section reflects the receipt and expenditure of funds from operations to attract money from investors and creditors, i.e. transactions related to long-term liabilities and equity. Typical input streams consist of:

• receiving money from creditors (accounts receivable are not included),
• sales of shares.

Typical output streams are associated with

• repayment of long-term bills, bonds, mortgage obligations,
• repurchase of shares from shareholders,
• payment of cash dividends.

To prepare a cash flow statement for a period, the following information is required:

• balance sheet of the enterprise at the beginning and end of the period,
• profit report for the period,
• some additional information, relating to the sale of assets (the ratio of sales price and book value), methods of settlement with suppliers and receiving money from consumers, etc.

Below is a model for generating an enterprise's cash flow.

There are two methods for preparing a cash flow statement:

1. direct method and
2. indirect method.

The differences in the use of these methods concern only the “operations” section.

The essence direct method lies in the fact that the main receipts and main payments from operating activities are sequentially calculated, the difference between which is the net inflow or net outflow of money due to operating activities.

Let's consider the use of the direct method to prepare a statement of cash flows from operating activities using the example of the SVP company. The company's profit statement and balance sheet are included in the previous section. Below is additional information needed to prepare a statement of cash flows.

In addition, the following provisions must be taken into account:

• interest rate bank loan is 16% every year,
• interest is paid until the last day of each year,
• the accounts payable, accrued liabilities and debt to the budget available at the beginning of the year are repaid by the enterprise in full during the year,
• debtors repay their debts existing at the beginning of the year in full.

In table 3.1 presents a cash flow statement compiled by the direct method based on the information available about the SVP company.

Table 3.1. Statement of Cash Flows (Direct Method)

Let us interpret each group of data contained in the statement of cash flows using the direct method. Let's look at the report data for XY year. The reader is given the opportunity to independently calculate the cash flow statement for the XX year.

Cash received from customers. For the calculation, the values ​​of accounts receivable at the beginning and end of the year are used, as well as the amount of net (from the return of goods) revenue for the period. The calculation is made using a formula expressing the balance of resources:

Accounts receivable at the beginning of the year + Revenue during the year –

Accounts receivable at the end of the year.

For XY year we get:

270,600 + 1,440,000 – 388,800 = 1,321,800.

Cash received from the redemption of notes receivable is calculated based on a comparison of the balance sheet values ​​of the “bills payable” item at the beginning and end of the year. For XY year we get: 47,400 – 42,800 = 4,600.

Cash paid for the purchase of materials. This calculation is made by combining two resource ratios: 1) for TMS and 2) for accounts payable. Based on the TMS balance, we have the following relationship:

TMS as part of sold products = TMS at the beginning of the year + Purchases – TMS at the end of the year,

which immediately follows:

Purchases = TMS as part of sold products - (TMS at the beginning of the year - TMS at the end of the year).

At the same time, based on the balance of the creditors' account, we obtain

Cash paid upon purchase = Purchases +

(Accounts payable at the beginning - Accounts payable at the end).

Combining the two calculated ratios leads to the desired value of funds paid for the purchase of TMS. In particular, for year XY we have:

1. Purchases = 654,116 – (51,476 – 45,360) = 648,000.
2. Cash paid for the purchase of goods and materials =

648,000 + (142,988 – 97,200) = 693,788.

Cash used to pay operating expenses is calculated by comparing two balance sheet items: “prepaid expenses” and “accrued liabilities” and all income statement items that relate to operating (i.e., non-financial expenses). These articles include:

• payment for direct labor,
• production overhead costs,
• administrative costs,
• marketing costs.

It should be emphasized that the amounts of these expenses are free from depreciation - it is indicated in the income statement using separate items.

Based on the balance of resources, a formula for calculating money spent on operating costs is easily obtained:

Amount of accrued transaction costs + Change of item

“prepaid expenses” - Change of the article “accrued liabilities”.

In our case, for year XY, the change in the “prepaid expenses” item is 11,000 – 10,000 = 1,000. The change in the “accrued liabilities” item is equal to 86,400 – 55,350 = 31,050. The amount of operating costs accrued by the company for the year is

As a result we get:

Cash spent on operating expenses =

624,520 + (– 1,000) – 31,050 = 592,470.

Payments of money on bills issued are determined by comparing the balance sheet values ​​of bills payable at the beginning and end of the year. In the case of the SVP company for XY year we have: 32,600 – 37,600 = 5,000.

Interest payment carried out by the enterprise during the calendar year. Consequently, all accrued interest that appears on the income statement resulted in cash outflows for the period. In year XY this amount was

The receipt of an additional bank loan is determined by comparing the “bank loan” item from the short-term debt section at the beginning and end of the year. The bank loan at the beginning of the year was 6,500, and at the end of the year this value was already at the level of 10,500. Thus, the company received an additional amount of money in the amount of 4,000.

Payment of tax arrears are determined by comparing the amount of taxes accrued based on the company’s performance in the reporting period and changes in the balance sheet item “tax debt” during the year. In year XY, SVP accrued 35,068 in income taxes. At the beginning of the year, tax arrears amounted to 34,054, and at the end of the year - 35,068. Thus, the company paid to the budget a total of 35.068 – (35.068 – 34.054) = 34.054. It turned out that the company paid off last year's debt and received a new debt equal to the income tax accrued in XY year.

Dividends received by the company are a consequence of her owning 15,000 shares in other businesses. These shares brought her 1,520 cash dividends in year XY, which were paid to her before the end of the year, and therefore were included in the cash flow statement.

We have exhausted all items in the “Operating Activities” section of the cash flow statement. The final value of net cash flow from operating activities turned out to be negative: (8.522). Compared to the previous year, when cash flow was positive, the company's ability to generate cash from its core activities has deteriorated. Essentially, the company incurred monetary losses, i.e. a significant positive net income of 81.825 generated negative cash flow. The explanation for this fact lies in the deterioration of the enterprise’s relationship with its suppliers. In addition, the company paid off significantly higher tax debts compared to last year.

Investment activity of the enterprise, As a rule, it is associated with operations affecting the fixed assets of the enterprise.

Purchase of assets led to a negative cash flow equal to the purchase price of the asset (with transportation, installation and commissioning) and amounted to 17,400 in XY year.

Sale of asset at a price above its book value increased the company's cash by 12,000.

As a result, cash flow from investment activities amounted to (5,400), i.e. as in the case of operating activities, it turned out to be negative.

Financial activity of the enterprise linked to sections long-term liabilities and own capital. Fundamentally, this can be the issue of new shares and bonds, the repurchase of shares or bonds from their owners, the repayment (full or partial) of long-term loans, the repayment of deferred income taxes and the payment of dividends (interest included in operating activities). In our case, the SVP company was engaged in the following types of financial activities.

Repayment of a long-term bank loan took place in year XY in the amount of 5,000. This can be seen by comparing the value of long-term bank loans at the beginning and end of the year.

Repayment of a portion of deferred income taxes was a natural result of the enterprise’s depreciation policy, aimed at the widespread use of accelerated depreciation.

Dividends paid in cash took place in the XY year both in relation to the owners of preferred and in relation to the owners of ordinary shares. Preferred dividends were paid in the amount of 3,600 and ordinary dividends in the amount of 22,000. The total amount of dividends paid was 25,600, which is an outflow of money from the company.

The resulting cash flow from financing activities was negative and amounted to (31,800). Net cash flow for year XY was equal to minus 45.752. The logical result of this was a decrease in the enterprise’s cash account and the value of the “marketable securities” item.

An essential element of preparing a cash flow statement is verification. As noted earlier, net cash flow (the total of the cash flow statement) must be equal to the change that results from the sum of the cash account and the item “marketable securities” during the year. This check is illustrated by the following table.

The data presented in the table coincides with the corresponding data in the balance sheet and cash flow statement, which confirms the correctness of the cash flow statement.

At indirect method When calculating cash from operating activities, net profit is taken as the starting point, which is subsequently adjusted to amounts that are included in the calculation of net profit, but are not included in the calculation of cash. These adjustments can be divided into three groups:

1. adjustments for income statement items that result in neither an outflow nor an inflow of cash;
2. adjustments for changes in non-monetary items working capital and short-term debts;
3. adjustments for items that are reflected in investment activities.

Below is a model that is used to calculate cash flow from operating activities using the indirect method.

We will provide explanations for each category of adjustments.

1. Depreciation costs, reflecting the depreciation of tangible and intangible fixed assets, are included in the costs of the enterprise for a period of time. At the same time, they are not associated with any monetary payments. Since, when calculating net profit, depreciation costs reduced it, and such a reduction did not lead to cash outflows, their value should be added to net profit when adjusting it to cash flow from operating activities. Once again, we emphasize that depreciation does not generate positive cash flow, but is added to net income in order to convert it into cash flow. Note that when calculating cash flow from operating activities using the direct method, depreciation costs did not appear in the calculation at all.

2. Let us explain the adjustment to net profit due to changes in non-cash working capital using the example of accounts receivable. An increase in accounts receivable over a period of time means that the revenue reported on the income statement on an accrual basis is more than the cash received. During the reporting period, the company shipped goods to consumers, reflecting these transactions with an increase in accounts receivable, collected money from consumers when the accounts receivable expired, but in the end the accounts receivable increased, i.e. the amount of debt owed by the company's consumers has increased. This means that the actual amount of money in the enterprise has decreased, as the company’s debts have increased. Therefore, net income based on accrual revenue must be reduced by the amount of the increase in accounts receivable. Let now the value of the enterprise's TMS decrease, as was the case at the SVP enterprise in XY year. At the beginning of the year, TMS was 51.476, and at the end of the year – 45.360. Since the volume of material resources at the enterprise has decreased over a period of time, this means that the enterprise did not purchase the same amount of goods and materials as at the beginning of the year, i.e. saved money. But it is known that money saved is money earned, i.e. the noted change in TMC led to positive cash flow. The general rule becomes obvious: net profit should decrease by the amount of increase in non-cash working capital and increase by the amount of their decrease. This rule is reflected in the above model number 2.1.

The exact opposite formula applies to short-term debts. Let the amount of accounts payable increase during the reporting period. This means that the company’s debts to suppliers have increased in relation to the volume of material resources purchased by the company and used in products sold. An increase in the borrower's debts means an increase in money and vice versa. The general rule is: net profit should increase by the amount of increase in any item of short-term debt and decrease by the amount of their decrease. This formula is reflected in clause 2.2 of the indirect method model.

3. Profit from the sale of an asset (which is obtained when the sale price of the asset exceeds its book value) is included as a separate line in the income statement, since it takes part in the calculation of income tax. At the same time, this profit has nothing to do with operating activities. Moreover, the amount of profit is taken into account twice: the first time as part of the income statement, and, therefore, participates in the formation of net profit, the second time this profit takes part in the positive cash flow from the sale of this asset in the “investment activities” section. Therefore, the profit from the sale of the asset should be subtracted from the net profit. If an asset is sold at a loss, the loss is taken into account in the income statement. At the same time, it does not lead to any cash outflows (like depreciation). Therefore, the loss from the sale of an asset should be added to the net profit when recalculating it into cash flow.

In table 3.2 presents a cash flow statement compiled on the basis of the indirect method. The “operating activities” section is compiled in full accordance with the above model. First of all, depreciation charges associated with the depreciation of tangible and intangible assets are added to the net profit. Then an adjustment was made for changes in non-cash items of working capital: accounts receivable, bills receivable, inventory and prepaid expenses. A similar adjustment (but using the opposite formula) was made to change the items of short-term debt: accounts payable, bills payable, accrued liabilities, bank loan and income tax debt. The final adjustment was to subtract the gain on the sale of the asset from net income. Net cash flow from operating activities was minus 8.552, which naturally coincided with the same result obtained using the direct method. The investing activities and financing activities sections remain the same as in the statement of cash flows prepared using the direct method.

Table 3.2. Cash flow statement (indirect method)

Comparing two methods of preparing a cash flow statement and two corresponding presentation formats, one can note the higher information content of the indirect format for diagnostic purposes. In fact, we previously discovered that cash flow from operations was negative during year XY. The cash flow statement allows you to reveal the reason for this effect. The table shows that the negative cash flow due to an increase in accounts receivable could not be compensated by an adequate positive cash flow due to an increase in short-term liabilities. There was a dramatic deterioration in relationships with suppliers. With an increased revenue flow, accounts payable decreased!!! Thus, instead of the natural positive cash flow from operating activities, the company received a negative flow of (8.552).

Let us note one feature of attributing some cash flows to one or another type of activity. In the example considered, the cash flow from obtaining a short-term bank loan is included in operating activities. This is justified by the fact that a short-term bank loan, in terms of its impact on the total cash flow of an enterprise, is equivalent to a commercial loan, which leads to an increase in accounts payable. In some cases, financial analysts classify cash flows resulting from the receipt and repayment of a bank loan as financial activities, emphasizing the “financial origin” of this cash flow. It seems that such a difference is not fundamental.

To conclude our consideration of this issue, we once again emphasize the need and economic content two financial statements: an income statement and a cash flow statement. In international financial statements Two bases for analyzing the effectiveness (efficiency) of the enterprise’s activities are used:

• accrual basis,
• monetary basis.

Both bases evaluate performance by comparing input resources with output resources: the difference between input and output resources is the final effect of the company’s activities.

Within the accrual basis, the input resource is accrued revenue, which is usually recorded as the first line of the income statement, and the total of all accrued costs is used as the output resource. Note that both revenue and expenses are classified as such if there is a legal obligation to pay them in cash. The payment itself may take place in the next reporting period. The difference between revenue and costs is called profit, which is essentially just a promise to receive money. In mathematical terms, profit is a necessary condition for receiving money.

Within the framework of the monetary basis, the input resource is the inflow of money, and the output resource is the outflow of money. The company's performance is measured by their difference, which is called net cash flow. The difference between this analysis format is that both input and output resources are recorded only if they are PAID. No legal obligations are taken into account - only money received or paid.

The income statement is prepared under the accrual basis, and the cash flow statement is prepared under the cash basis. The cash flow statement process essentially involves converting the company's performance data from an accrual basis to a cash basis performance measurement. Comparing these estimates allows you to draw a conclusion about the company's ability to generate cash, which is one of the main factors for the success of any business. The example of the SVP company discussed above gives reason to conclude that this company has problems with “generating money.” In the XX year, the company's net profit amounted to 79,459. At the same time, the cash flow from operating activities created by this profit amounted to only 37,338. In year XY, the situation worsened, the company earned more profit, namely 81,825, and the cash flow turned out to be negative. If a company does not take emergency measures to save money, it may find itself on the verge of bankruptcy.