Cash Flow Statement:
How to Calculate the Net Increase or Decrease in Cash?

Q: How is the figure for net increase/decrease in cash calculated or arrived at?


A:
To calculate the net increase/decrease in cash you simply add up the totals of the three sections:
  1. Cash Flow from Operating Activities

  2. Cash Flow from Investing Activities

  3. Cash Flow from Financing Activities

Cash Flow Statement Sample


In the cash flow statement above we calculate the net increase or decrease in cash flow as follows:

Net cash flow from operating activities + Net cash flow from investing activities + Net cash flow from financing activities
= $24,800 -$9,000 + $13,000
= $28,800


Note that the net cash flow from investing activities is shown in parentheses () in the cash flow statement above, meaning that it is -$9,000 or a negative cash flow of $9,000.

Also note that the cash at the beginning and at the end of the period is just included as part of the end of the report as a sort of breakdown of the net increase or decrease in cash flow during the year.

Hope that makes sense now.

All the best!

- Michael Celender
Accounting Basics for Students


Return to the main Cash Flow Statement Lesson

Comments for Cash Flow Statement:
How to Calculate the Net Increase or Decrease in Cash?

Click here to add your own comments

cash flow statement
by: Anonymous

How do I know if there is net increase or decrease in cash?

Help me please
by: Anonymous

Are we doing addition or subtracting to get the amount im lost here...

Click here to add your own comments

Return to Ask a Question About This Lesson!.











© Copyright 2009-2018 Michael Celender. All Rights Reserved. 
Click here for Privacy Policy.

privacy policy