Streamline your financial management with our Free Cash Flow Statement Template. Easily compute key financial indicators to enhance fiscal strategy.

1

Determine the starting point

2

Calculate operating cash flow

3

Calculate capital expenditure

4

Subtract Capital Expenditure from Operating Cash Flow

5

Obtain net working capital

6

Subtract net working capital

7

Adjust for tax shield

8

Add back non-cash expenses

9

Minus changes in working capital

10

Correction of errors if any

11

Generate the Free Cash Flow Statement

12

Review and check accuracy of the statement

13

Approval: Head of Finance

Determine the starting point

Identify the starting point for calculating the free cash flow. This task sets the foundation for the rest of the process. Determine the current period for analysis, whether it's monthly, quarterly, or annually. Decide if you will be using cash flow from operations or net income as the starting point.

1

Cash flow from operations

2

Net income

Calculate operating cash flow

Calculate the operating cash flow using the selected starting point. This task involves analyzing the cash flows from operating activities to determine the net cash flow generated by the core operations of the business. Consider factors such as revenue, expenses, gains, and losses.

Calculate capital expenditure

Determine the capital expenditure for the selected period. This task involves analyzing the cash flow related to capital investments in the business, such as purchasing or upgrading assets. Consider factors such as asset purchases, improvements, and disposals.

Subtract Capital Expenditure from Operating Cash Flow

Subtract the capital expenditure from the operating cash flow to determine the cash flow available after capital investments. This task helps understand the impact of capital expenditures on the overall cash flow position of the business.

Obtain net working capital

Calculate the net working capital for the selected period. This task involves analyzing the cash flow related to the working capital of the business, including changes in current assets and liabilities. Consider factors such as accounts receivable, inventory, accounts payable, and other current assets and liabilities.

Subtract net working capital

Subtract the net working capital from the cash flow available after capital investments to determine the free cash flow before tax effects. This task helps assess the impact of working capital changes on the cash flow position of the business.

Adjust for tax shield

Consider the tax shield effect on the free cash flow. This task involves assessing the tax implications of the cash flow calculations and making necessary adjustments.

Add back non-cash expenses

Add back non-cash expenses to the free cash flow. This task involves identifying non-cash expenses, such as depreciation and amortization, and adjusting the cash flow calculations accordingly.

Minus changes in working capital

Subtract the changes in working capital from the free cash flow to account for the impact of working capital fluctuations. This task helps evaluate the effect of changes in current assets and liabilities on the cash flow position of the business.

Correction of errors if any

Identify and correct any errors in the cash flow calculation. This task involves reviewing the calculations and ensuring the accuracy of the cash flow statement.

Generate the Free Cash Flow Statement

Generate the final free cash flow statement using the calculated values. This task involves compiling the cash flow information into a statement format suitable for analysis.

Review and check accuracy of the statement

Review the generated free cash flow statement for accuracy and completeness. This task involves analyzing the statement and cross-checking the calculations with the provided data.