Part 4: Simplifying the Cash Flow Statement – Mastering Your Business’s Lifeline
In Part 3, we discussed the Balance Sheet. Today, we talk about the final piece: the Cash Flow Statement. It bridges the Income Statement (profits) and Balance Sheet (position) by showing actual cash moving in and out of your business over a period.
For Oregon entrepreneurs facing seasonal dips, inflation, or supply-chain issues, this statement is often the most critical—it tells you whether you have the cash to cover bills, invest, or weather slow months, even when profits look good on paper.
Key Components in Plain English:
Operating Activities — Cash from your core business (starts with net profit and adjusts for non-cash items like depreciation).
Investing Activities — Cash spent on or received from assets (e.g., buying new equipment).
Financing Activities — Cash from loans, owner contributions, or repayments.
Net Cash Flow — The overall change in cash during the period.
Example: A Salem food truck shows positive cash from operations but spends on new equipment (investing outflow). The net result is positive, but tracking payment timing and receivables helps avoid future shortfalls.
Quick Tips:
Forecast cash needs to bridge gaps between profits and actual cash.
Focus on operating cash flow—it's the most reliable long-term source.
Align with Oregon-specific cycles like tax deadlines or seasonal revenue.
This statement gives you the full picture of liquidity so you can plan and grow with confidence. If cash flow visibility is a challenge, I can help.
I'm Sanjay Reddy, founder of Willamette Way Bookkeeping & Consulting™. I partner with fellow Oregon small business owners, drawing on 32 years in finance, operations, and Lean process improvement to clean your books and streamline your systems.
Clean books → clear insights → less waste → confident growth.
I handle the numbers and systems. You focus on doing what you love—better. Ready to find a better way together? Schedule a free consultation. Let’s talk: www.willametteway.com.
