How to Create a Statement of Cash Flows

How to create a statement of cash flows in AGRIS

At its most basic form, the cash flow statement organizes and reports the cash generated and used. Here are a few ways the statement of cash flows is used:

1. The cash from operating activities is compared to the company's net income. If the cash from operating activities is consistently greater than the net income, the company's net income or earnings are said to be of a "high quality". If the cash from operating activities is less than net income, a red flag is raised as to why the reported net income is not turning into cash.

2. Some investors believe that "cash is king". The cash flow statement identifies the cash that is flowing in and out of the company. If a company is consistently generating more cash than it is using, the company will be able to increase its dividend, buy back some of its stock, reduce debt, or acquire another company. All of these are perceived to be good for stockholder value.

3. Some financial models are based upon cash flow.

In AGRIS terminology, all the cash that came into a bank code and all the cash that went out of a bank code will be shown. AGRIS software does not have the ability to pull this type of information from the ledger in an official report, where all entries are posted in summary form. However, we can pull this basic information from the Execution Work File where we have the detail, and we can exclude manual ledger entries that did not hit a bank code.

Process:

1.     Build execution work file in SJI > Execution ID > Build Execution Work File for the year up to the current date. Answer Yes to include all detail

   1. Open

      

2.     Run the Ledger Account Detail Report for asset bank codes.

   1. SJI > Report Manager > Execution Report > Execution Report > Choose the work file just built > 1. Print Standard Reports > 2. Ledger Account Detail Report

   2. Open

      

   3. Enter the beginning and ending account code number that represent bank accounts in AGRIS. Enter date ranges to limit date range if only wanting to run for a certain month compared to the year.

      1. Remember: this is reporting from the work file, not live data. This is built for a specific point in time, not live.

      2. Open

         

   4.     On the Additional Options screen, answer NO to include General Ledger entries and NO to include Execution ID Budgets entries.

      1. Open

         

3.     The grand total of the report will show the net cash flow, or all cash in and out, for the date range chosen.