Build a Cash Flow Statement From Scratch Using a Balance Sheet and Income Statement

[@KenjiExplains]

👉 Get 25% OFF Financial Edge using code KENJI25: bit.ly/3Lla95f

[@antonmursid3505]

Antonmursid🙏🙏🙏🙏🙏✌🇲🇨🇲🇨🇲🇨🇲🇨🇲🇨✌💝👌🙏

[@KenjiExplains]

🚨 Correction: short-term debt should not be accounted for under working capital. It should go under financing activities. Cheers!

[@TusharKumar-jb6vp]

Yes I was about to correct it but then I saw your comment

[@tuhinkumar2]

@kenji explains What about the taxes which needs to be deducted under the operating cash flows?

[@jeimmylorenasolerlopez1312]

Great video! I have two questions. How do we accounted for the short term lease liability? And how do we accounted for a ROU operating lease assets?

[@SurgeEquityResearch]

@@jeimmylorenasolerlopez1312Your question makes no sense

[@misfit2022]

Explains why I only got £85 in Financing 😁 All good

[@danielmwabila8064]

Kenji Explains, also known as every business student's best friend! 😁😃 Truly appreciate the endless value you keep providing!

[@KenjiExplains]

Cheers Daniel thank you for watching the videos! Hope all is well man :)

[@roseb.5367]

Your voice forces my nerves to calm down and just listen. This was so beneficial for me. We are working on cash flow in my Finance class. Thank you

[@Jesstries13]

Amazing. Thank you so much. I have a horrible corporate finance professor and this channel is literally how I am getting through my masters course. 🙌🏻

[@KenjiExplains]

Happy to help!

[@tanjasahaidak1617]

I love the posibility to load the document and work with you! Thanks!

[@gehadsayed7157]

Thank you for simplifying the Cash flow statement

[@reebazm5028]

Hi Kenji. Its really fabulous to see this video. Request to show direct method with the same data.

[@kashmoney1]

dude this is amazing, thanks so much! Can you explain deferred tax situation?

[@andymarci6766]

We were deserving this type of video! Thanks professor Kenji!

[@KenjiExplains]

Hope you enjoyed it!

[@abdallahlakkis449]

You're such a king honestly. Thanks a lot

[@KenjiExplains]

Happy to help!

[@dakshithragupathi3992]

@kenji, Is the change in other current assets be +150, because the company gained cash from selling current assets from 1,650 to 1,500?

[@jackmedin6768]

Most helpful KZbin channel

[@philevans906]

It does what it says on the tin; Kenji does, indeed, explain. 👏

[@mariab4010]

AMAZING VIDEO HONESTLY I DON´T HAVE WORDS

[@ethaneshelman5494]

This was super helpful. Thank you Kenji!!

[@PraveenKumar-ei6qr]

This is good. I did my accounting class a year ago and already forgot some basics. This reminded me a lot. Thank you.

[@lucabenattar7365]

Congrats Kenji ! The quality of your videos is amazing !

[@KenjiExplains]

Thanks so much for the comment Luca, really appreciate it!

[@raihandawood987]

Simply superb. You explained the toughest thing in a very simpler form. Hats off Sir !!

[@ShawnWi]

Working on my M.S. in Finance and I zero background working in accounting or finance...(I work in insurance) this video is a great explanation for something that is difficult to understand from just reading the textbook

[@arunkumarilangovan1707]

VERY USEFUL CONTENT. MANY OF MY DOUBTS WERE CLEARED IN THIS VIDEO. THANK YOU.

[@yudispace]

Thanks Kenji for sharing. Your explanation is very detailed

[@soumyajain7863]

Hi Kenji, I love your content as it provides exact information about finance and its working. Just wanted to ask any videos on DCF modelling from scratch ?

[@KenjiExplains]

Thank you, appreciate your support! No unfortunately don't have those as they're very lengthy (at least to do well). The only place we have those available is in our course: learn.careerprinciples.com/courses/finance-valuation-course

[@shivanshshukla5883]

@@KenjiExplains how long is your course hours?

[@fazalraheem]

You have great explanation Sir, kindly guide how to create Lend and Borrow track record in appsheets app.

[@xxflow995]

For those in need: that 384 change in accumulated other comprehensive income (AOCI) is the difference between the IS D&A and BS implied D&A; Therefore, assuming that there is no amortisation, the income statement D&A includes a non-cash adjustment that is in fact an unrealised revaluation (likely of PPE) which is reflected in AOCI. The cash-flow statement CFFO and CFFI should be modified to reflect this as follows - CFFO: D&A is 360, CFFI: Capex is -26 (calculated as sum of change in Gross PPE -410 and change in AOCI +384). You are welcome :)

[@ettoremurano888]

Great video! It would be great if you made one on how to restructure financial statements, don’t you think?

[@jamlawas6924]

Hi Kenji, thank you for this video. May I know if SG&A and other operating expenses should be included in Cash flow under Operating activities? Should I treat them the same as depreciation and not get the difference? Thanks

[@kanayoadingupu3966]

Net income takes care of the P&L aspect of cashflow. You do not need to bring in any other P&L item except for Dividend paid calculation

[@artmusicworlds]

it was very solid good explanation thank you

[@Saud.S]

Thank you very much, this helped me alot.

[@indira6699]

your presentation is good. Thank you

[@anv.4614]

Dear Kenji, Thank you for great lesson.

[@basantjangir1]

Thanks @KenjiExplains this is a very useful video on cash flow statement

[@kriscahya]

hi, kenji, how to make the Change in formula you make auto kinda to the right not in line the Change in Title thanks

[@ChristAlvarezBarreto]

THANK YOU FROM PUERTO RICO

[@xmen123ify]

What about the sale of an asset loss or gain don’t you have to adjust it in the operating activities part of the cash flow ? And the sale will be adjusted in the investing part

[@maurernicolas7829]

Thank you for uploading such good content

[@vinayaktiwari7702]

kudos very well explained

[@mr.gk5]

How do you set up the check thing at the end of the balance sheet?

[@alejandrojara2024]

Thanks so much, Kenji

[@dianehaen2407]

amazing docs and video

[@nicolearaujo5590]

Hi Kenji. Can you do a Seidman Financial Model 13 weeks cash flow tutorial?

[@juandiegoforero3805]

I have a question if you start from the net income for the cash flow statement, shouldn’t you take away interests? and is not correctly taking into account the operational taxes, isn’t it?

[@daniels5166]

Thank you for the valuable content

[@kayvanshah5216]

Thank you sir!!!

[@anant0089]

Hi pls help me I need to figure it out why increase in inventory in company balance sheet will go in Cash Flow only but not under purchases in Trading and P&L account and reduce net/gross profit accordingly ? Example company:

[@michaelquach7046]

Another solid exercise anyone can do to prepare for finance interviews

[@KenjiExplains]

Thanks for the help!

[@rossanaaquino9118]

sir where will i place cash received from compensation income

[@himanshujoshi4927]

Could you let how to match balance sheet tallying in Excel

[@ronaldpalmgren9478]

I very much enjoyed your video.I am creating a month to month forecast but do not know how to treat downpayment from customers and downpayments to vendors in the statement of cash flows.Can You advise? thanks

[@sujinseo9545]

Hi Kenji I,m really enjoying watching ur videos, the link for the excel file is for a chart,not for building an income statment

[@KenjiExplains]

Link updated sorry: view.flodesk.com/pages/62da585cc9d3abbafd6c44b5

[@TheSivaroshan]

When you take the difference between share capital won’t be the divided paid be counted ? Why took it separately again as well ?

[@ChristianGentolia-o5u]

What if D&A is not in a separate line item in the IS? What if it is embedded in COGS or Opex? How would you calculate D&A then, in order to add it back to the CFS?

[@andresfernandezdelvalle803]

Great video, I just can't understand why you add in the depreciation to the operating cash flow? Cheers!

[@kanayoadingupu3966]

This is in other to adjust for non-cash items from net income

[@benwang7057]

This video is wonderful

[@retrobox4119]

From where we can find the final excel file?

[@qaniacademy2006]

thanks of nice Explanation

[@MellowMelodiesGoa]

I am not from Finance, but wanted to learn about DCF which requires deriving FCF, thanks.

[@andreugiro2807]

Thank you my friend! Keep doing this interesting videos!😁

[@KenjiExplains]

Thanks for the visit!

[@camlex6310]

Really easy to understand thanks!!

[@KenjiExplains]

Glad to hear that!

[@karanarora8027]

hey i was analyzing a company's cash flow statement and the changes in current assets reported on cash flow statement does not correspond to the change in current assets on the balance sheet. how to go about this thing?

[@hassanraza-vb5ss]

do we really need cash flow statements? i mean our system has all cash movements recorded and we have income statements, expense trends, capex, BS packs which automatically tells us all movements in cash + the ending balances. please answer my question cz i am really confused. thank you in advance :)

[@hammadhasan6953]

When calculating Change in Working Capital, why calculating receivable, inventory and payables separately? what if, we first calculate the working capital of both years and takes the change of working capital?

[@malikikram3643]

Sir if debenture is given in balance sheet how i understand that debenture or issued or redeem

[@shrijapathak4829]

I wanted to point out a couple of things. I might be completely wrong. Part of debt repaid is already subtracted in the income statement, so to account for that short-term debt repaid and portion of long-term debt repaid must be added back in CF from operations and subtracted back from financing activities to ensure there is no double substracting. Moreover, shouldn't the change in other assets be added/substracted from investing activities?

[@0401412740]

It's easy to do, just the non-cash movements, like provisions, allowance for doubtful debts, depreciation, financing costs on lease liability need to be considered

[@piyushsharma2829]

Hey kenji, you explain very clearly and your content is really good. I have theoretical knowledge about financial modelling and valuations (but I don't understand when it comes to practically making Models) can you suggest best Books to learn about financial modelling, Valuations(Basic to advance) and Finance (Investment Banking related).

[@justinseah4011]

Noticed for the movement in PPE, this doesnt seem 100% correct because the movement may be due to a revaluation of properties. So there would be a need to split out the fair valuation appreciation portion (not to be included). Right?

[@denvernazareth2778]

The gross PPE is essentially the book value and does not account for depreciation/appreciation, therefore you can use it to identify whether capital expenditure has been increased or not. Using net PPE would be incorrect if you do not add back the depreciation

[@ChasingMyLiberty]

Jedi Master Kenji teaches another lesson in the ways of the Force.

[@KenjiExplains]

hahah thank you!

[@natesome]

Question for You Kenji.... I noticed that you did not include the Net Income in your calculation for Change in Cash. Is that an error?

[@leo2hari]

have a question or confusion here, Is this the correct way to subtract the previous year's value from the current year's value? check WC heading , Accounts Receivable increased in 2021 then why would be figuring it out to be as negative change?

[@rimarima8926]

Hello sir, im really confused where to account contingency fund in cash flow it is separated account from cash in assets But in ledger you cannot account it anywhere.. So where does contingency fund go with?? The capital????

[@ramdanijim]

Thanks for explaining, Mr. Kenji. It makes me wanna know about you. Hope you're always fine. Can you tell me Which country do you come from?

[@KenjiExplains]

Thanks for watching! From Spain (spanish father & japanese mother)

[@armitageshanks2499]

Kenji, so do all cash flow statements show no original information? Everything in cash flow statement can be built from balance sheet and income statement?

[@KenjiExplains]

Yes! It shows the change which is kinda new information but the inputs are still all from BS and IS

[@pabloorellana6036]

Hi there Kenji , what could your recommend me (from your courses )… I’m civil engineer and for this 2023 year I would like to do like an investment for my company.. buying an excavator… so what could I do … like a project finance for the company trying to figure out my incomes and outcomes…? Thank you looking forward your reply

[@thesenate8268]

download link doesn't work anymore :((

[@selenabui7957]

I downloaded Free Excel file but it can not be opened . Keep showing errors. Is it still available?

[@ronaldroldancavero]

Hi Kenji. I always watch your videos, thanks for explain really good. I'd like to know why you add short term debt in operating cash flow, I understood it was part of financing cash flow. Why it could be? thanks so much

[@KenjiExplains]

Yes you're completely right, it should not be under working capital. Sorry about that and thanks for pointing it out :)

[@alexshah7277]

Hello Kenji... I want to ask here... Now all business were done in online which is all transaction were paid via bank... Is it consider as cash flow?

[@kanayoadingupu3966]

Yes. In accounting, Cash refers to Physical or Banked cash

[@edsonmachel7516]

Short-term debt is not a working capital item, net working capital refers to non - cash and non-debt items

[@KenjiExplains]

Yes completely right, added a correction on the comments. Thanks for pointing it out :)

[@user-hq2lg5sh3x]

Sir what is the monthly salary of investment banker

[@godismyway7305]

Why we did not deduct Interest payment $289 in our Financing ? Subscribed, Thank you!

[@KDBabes]

U can do it, if u r doing it u have to add back interest in operating activities

[@sabazehrananji3406]

A question: why didn't we include accumulated depr in investing activies?

[@ruthenianthruth]

Kenji, may I ask why you ignored Accounts payable, Taxes payable and Other Current liabilities?

[@ruthenianthruth]

Sorry, I missed that you did it in Cashflow from operating activities (in Working capital). Thanx for a good video!

[@ChasingMyLiberty]

Interview? I have to build this for a job interview?

[@KenjiExplains]

lol it would be for a final round interview yeah haha (obviously not all companies do this specific case study though)

[@solomonbhandari-young4154]

Amazing

[@bhaveshgoswami.]

I have a question here. Depreciation that we are adding back is 744 whereas the movement in Accumulated depreciation is 360. What could be the reason of difference? How our cash flow is tallying without considering this difference?

[@KDBabes]

Yes i think u r correct. BS will tally as Cash figure in CFS is taken an hit from (744-360) depreciation and Cash figure in BS is just from CFS

[@cuaumuz]

Thank you very much for this very helpful video. I am going to save this because I know it will definitely come in handy again!

[@hieuieu9194]

Did you reduce form the balance statement and income statement?

[@emilsa488]

Yeah, but what good it does if, for example, Net income is not categorised? Also, income is booked when invoice is written. Is there is income booked, it does not mean that money was received.

[@Richard.bassan]

The excel file is not the same used in the video

[@KenjiExplains]

view.flodesk.com/pages/62da585cc9d3abbafd6c44b5

[@samuelb6550]

If someone can help with the depreciation, i'd really appreciate. The cashflow uses 744 as depreciation and amortization whereas the Balance sheet shows 4800 and 5160. Where does the 744 come from?

[@thesenate8268]

It comes from the income statement. Balance sheet only shows depreciation, not amortization. Income statement shows both, that's why.

[@KDBabes]

I think it's a mistake, since in video cash balance is taken from CFS, Balance sheet is matching. Practically Cash Balance would be physically verified and same will be considered in BS. In this scenario, Closing cash is being affected by the difference in depreciation in Balance sheet and Income statement

[@Fantatizee]

But you're not teaching me how to make the template in the first placeT-T

[@jonnyfavela1011]

short term debt is not a working capital item

[@KenjiExplains]

Yes you're completely right, it should not be under working capital. Added a comment to correct that. Thanks for pointing it out :)

[@ankit689]

Why to derive..can't you take an example as to how you arrived correctly!!!!

[@mohamedhabeshee5502]

Kenji you are great but very fast Man you need to slow down

[@ruchikabandara4010]

dont you need to concern on payment of tax in cash. You got net income after tax and interest and you didn't concern about the tax and interest payment in term of cash.

[@KHALIDLEMAR-t3z]

The Total of Change in Cash from Cash Flow Is Wrong It is been equal to 8145

[@KDBabes]

CF from investing activity is negative 1k

[@willzinner8813]

First!

[@KenjiExplains]

lol

[@HUMAN-VERSION4]

Your soosmart and handsome

[@rimarima8926]

Hello sir, im really confused where to account contingency fund in cash flow it is separated account from cash in assets But in ledger you cannot account it anywhere.. So where does contingency fund go with?? The capital????