A cash flow statement reports how a company's cash balance changed over a period: what came in and went out through operating, investing and financing activities, and how cash moved from the opening to the closing balance. The template above builds it with the indirect and the direct method, checks the result against cash on the balance sheet, and prints it in the standard cash flow statement format.
Net profit of SAR 80,000, depreciation of SAR 20,000 and a SAR 30,000 rise in receivables give operating cash flow of SAR 70,000. With SAR 50,000 of equipment bought and a new SAR 40,000 loan, net change in cash is SAR 60,000, taking cash from SAR 45,000 to SAR 105,000.
How to use the cash flow statement template
- Pick a method tab: indirect if you have the income statement and opening and closing balance sheets, direct if you have cash and bank movements.
- Enter each line with a positive amount, choose its activity, and mark it as cash in or cash out.
- Add an Opening cash line and a Cash per balance sheet line with the closing cash on your balance sheet.
- Check the reconciliation card: zero means the statement agrees.
- Open Print format, choose the method and download a PDF or Word file. Excel comes from the method tab with its formulas.
What goes in each column
| Column | What to enter |
|---|---|
| Line item | The movement, such as Increase in trade receivables or Purchase of equipment. |
| Activity | Operating, investing or financing, or one of the two cash lines for the check. |
| Cash effect | In (+) or out (−). |
| Amount | Always a positive value. |
| Cash flow | Calculated: the amount, negative when it is an outflow. |
What is a cash flow statement, and why is it not profit?
The income statement books revenue when a sale is made, even if unpaid, and expenses when incurred, even if not yet paid, so profit is not cash. Try the "Profitable but cash is falling" example: net profit is SAR 95,000, but receivables grow by SAR 85,000 and inventory by SAR 60,000, so operating cash flow is minus SAR 25,000, and after SAR 30,000 of dividends cash falls from SAR 120,000 to SAR 65,000.
The three activities
Operating activities cover cash from customers and payments to suppliers, staff, expenses and zakat (SAR 70,000 in the example). Investing activities cover buying and selling fixed assets and long-term investments (minus SAR 50,000). Financing activities cover loans and repayments, share capital and dividends (SAR 40,000). Their total is the net change in cash, SAR 60,000.
Cash flow statement format: the indirect method
Start from net profit, add back non-cash expenses such as depreciation (80,000 + 20,000 = 100,000), deduct increases in current assets and add decreases (receivables up 30,000, inventory down 12,000), then add increases in current liabilities and deduct decreases (payables down 12,000). The result: 100,000 − 30,000 + 12,000 − 12,000 = SAR 70,000.
The direct method, and which to choose
The direct method shows actual receipts and payments: SAR 470,000 collected, and SAR 280,000 paid to suppliers, 75,000 in salaries, 37,000 in rent and expenses and 8,000 in zakat. It also gives SAR 70,000, because the methods differ only in how operating activities are presented. The indirect method is the usual choice in published statements in Saudi Arabia; the direct method reads more clearly for owners tracking liquidity.
Common mistakes
- Showing depreciation as a cash outflow; it uses no cash and is added back.
- Reversing working capital signs: higher receivables reduce cash, higher payables increase it.
- Putting equipment purchases under operating instead of investing activities.
- Ignoring a non-zero reconciliation difference, which points to a missing or duplicated movement.
Accounting and regulatory notes
The template follows the general cash flow statement format and does not replace statements prepared under the standards endorsed in Saudi Arabia by SOCPA. The standard allows choices in classifying interest and dividends paid and received; apply your company's choice consistently [verify]. Statements filed with authorities may need an external auditor's report.
When the business makes a profit but the bank account is thin
Microtec accounting software is built for businesses in Saudi Arabia and brings sales, purchasing, inventory, finance and HR into one place.
Frequently asked questions
What is cash flow?
Cash flow is the net cash coming into and going out of a business over a period. In the example, the three activities bring in SAR 60,000 more than goes out, so cash rises from SAR 45,000 to SAR 105,000.
Is depreciation a cash flow?
No. Depreciation spreads the cost of an asset bought earlier over its useful life. Cash left when the asset was bought, under investing activities, so depreciation is added back to profit in the indirect method.
How are interest and dividends classified?
Dividends paid usually go under financing activities, and finance costs paid under operating or financing activities according to the company's policy under the standard. Keep the classification the same from year to year.
Which is more accurate, the direct or indirect method?
Both give the same net cash from operating activities, SAR 70,000 in the example. The direct method shows where cash came from; the indirect method is easier to prepare from the statements and explains the gap between profit and cash.
Does the template include worked examples?
Yes, three: a profitable company under the indirect method, the same company under the direct method, and a profitable company whose cash is falling. Change one figure, watch the effect on cash, and download the result as a PDF.