Home » Financial Modeling Quick Lesson: Cash Flow Statement (Part 1) financial cash flow

Financial Modeling Quick Lesson: Cash Flow Statement (Part 1) financial cash flow

by Dragonspear



Learn the building blocks of a financial model. In this video, we’ll build a cash flow statement given an income statement and balance sheet in Excel.

To download the Excel template that goes with this video, go to

The accounting here is a simplified presentation of how the three major financial statements are inter-related and lays the foundation of financial statement models in investment banking.

Many accounting questions that we see time and again in finance interviews are designed to test the understanding explained in this exercise. .

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Financial Modeling Quick Lesson: Cash Flow Statement (Part 1)

Financial Modeling Quick Lesson: Cash Flow Statement (Part 1)

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Financial Modeling Quick Lesson: Cash Flow Statement (Part 1)
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41 comments

Abed Mh 13/09/2021 - 11:04 Chiều

Thank you

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maria Coogan 13/09/2021 - 11:04 Chiều

What do you do if your first year is zero? Starting from scratch?

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Deborah Capasso 13/09/2021 - 11:04 Chiều

Never believed it was real until hackerpayfer@gmail.com surprised me with the transfer of $30,000.

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Gatra Gumelar Hadi 13/09/2021 - 11:04 Chiều

so basically you using indirect method right?

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Yemi Ife 13/09/2021 - 11:04 Chiều

You said we need a 2 periods statement to build a cash flow. What if it's the first year of the business? Does it mean you can't make a cash flow statement or does it work different?

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Moises Salvador Osorio González 13/09/2021 - 11:04 Chiều

Hi, im from Mexico, Can someone explain me all this financial terms? Im accountant too, but i want to learn how USA work in accountability. I really want to lear to increace my knoledge. I can explain some mexican accountability too.

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Alex 13/09/2021 - 11:04 Chiều

Thanks for providing a link to the template!

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akhil chittle 13/09/2021 - 11:04 Chiều

Deferred taxes are shown in the balancesheet as long term item but considered in the cash flow statement under operating activities.
Can u kindly clarify.

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Denise Sabato 13/09/2021 - 11:04 Chiều

Digf

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D XD 13/09/2021 - 11:04 Chiều

Are financial models like the one in your video what interviewers in finance job interviews ask about?

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Ik Emmanuels 13/09/2021 - 11:04 Chiều

Hi Thanks for your Video. But Please can I present cash flow with just one year's statement. No Prior year

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Millie 13/09/2021 - 11:04 Chiều

Hey I didn’t see you record PP&E under CFI. I can understand that Capex serves the same purpose but then I saw another uploader deduct pp&e(there it’s listed as “purchase of land and equipment” which I understood as pp&e, the same item on your worksheet) directly under cfi without calculating/even mentioning Capex so I’m very very confused…there’s a difference of depreciation between Capex and gross pp&e so idk when i should use Capex and when to directly use pp&e…

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MozPassion 89 13/09/2021 - 11:04 Chiều

Why the other current liability are not considered?

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Haider Lami 13/09/2021 - 11:04 Chiều

I think there is an error, cash flow should start with profit from operation with no deduction of tax expenses

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Ananth T M 13/09/2021 - 11:04 Chiều

Excellent explanation, learnt much

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K Boone 13/09/2021 - 11:04 Chiều

Excellent presentation!

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Ahmad A. 13/09/2021 - 11:04 Chiều

So this is what a financial model is? Statements on an excel sheet? I am an undergrad so, sorry for ignorance.

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sajjad hosain 13/09/2021 - 11:04 Chiều

can you give me this excel sheet?? please

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ashwat menon 13/09/2021 - 11:04 Chiều

Sir why havent you accounted income tax payable in cash flow statement?

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Alex Karas 13/09/2021 - 11:04 Chiều

Great video!

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Sarah Nyakazingo 13/09/2021 - 11:04 Chiều

Excellent

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Pk Pk 13/09/2021 - 11:04 Chiều

can anyone suggest me which is the best institute to learn financial modeling

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Rattana Waran 13/09/2021 - 11:04 Chiều

need to be so patient

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Joe R 13/09/2021 - 11:04 Chiều

😀 HOLY CRAP IT MAKES SENSE.

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Mohammed S 13/09/2021 - 11:04 Chiều

!- can i have CF from day 1 ? because its seems like we can have both income St and BS from day 1 but CF not because we need other data to compare its with, for example year 1 and year 2 or QTR 1 and 2, am i right?

2- if we can start from day one how can we do that? as we don’t have info ? as there is only one data of inventory for example not 2 to compare,
thanks

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Asad ullah 13/09/2021 - 11:04 Chiều

Awesome Explanation 

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NeverSayDonkey 13/09/2021 - 11:04 Chiều

Can someone who's is familiar with the matter explain to me, why "depreciation&amortization" is taken as a inflow of cash from operations? As I understand, d&a represent how much less your inventories are worth over a period of time. Thus, it does not generate cash at all, and can potentially subtract an amount.
In other words why it's positive instead of negative?
P.S: very nice and useful tutorial/walkthrough. Keep on doing good work. 🙂

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Alex Martino 13/09/2021 - 11:04 Chiều

I was calculating a cash flow statement and there was something called comprehensive income on the balance sheet which accounted for changes in unrealized gains on available for sale investments. If I didn't include this amount, the change in cash wouldn't tie out…but I don't get it because it's only a balance sheet item and never hits the income statement or involves a cash transaction. Help!!

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Hui hoho 13/09/2021 - 11:04 Chiều

why do you add depreciation & amortization instead of depreciation & amortization net of tax?

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Roger 13/09/2021 - 11:04 Chiều

Nice job! Understood everything

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YACINE EK 13/09/2021 - 11:04 Chiều

why some people try to make this sort of modeling using VBA and macros
i 'm just tring to understand the idea of macros
because as i see a a fixed formula can make the task no mater if we change datas on balance sheet or income statement
can someone explain me please

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sadhubaba77 13/09/2021 - 11:04 Chiều

Excellent presentation with clear logic behind the accounting principles and interlink between the three financial statements. Very easy to follow!!

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Wall Street Prep 13/09/2021 - 11:04 Chiều

Seems to work fine – try to refresh your page.

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screamingdizbusters 13/09/2021 - 11:04 Chiều

Video starts at 6:00

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Wall Street Prep 13/09/2021 - 11:04 Chiều

Hi Gary,

The link is active – some browsers have a problem downloading excel files directly so try to right click over the link and select "Save Target As'…that should do it, but let me know if you still have a problem.

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Gary Hutson 13/09/2021 - 11:04 Chiều

Any chance of having an example worksheet. I used the hyperlink an it states 'page not found'. Would it be possible to send me a copy or post online? Good explanation and good tutorial. I am undertaking my MBA and this has helped immensely. Cheers Gary

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zeez brah 13/09/2021 - 11:04 Chiều

to*

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Wall Street Prep 13/09/2021 - 11:04 Chiều

Thank you!

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Wall Street Prep 13/09/2021 - 11:04 Chiều

Thanks!

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peanurse 13/09/2021 - 11:04 Chiều

First-rate tutorial – You explained it infinitely better than my university lecturer

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James Perry 13/09/2021 - 11:04 Chiều

Sir,
I was so thrilled 2 c all 3 statements on a single excel sheet. That is so impressive and makes the CFS e-z 2understand. Its something i had in mind for quite some time.
A million thanks for the same.
Also, thank u 4 taking the trouble 2 prepare all this, that i would like 2use 2practice.
Also, a lot of explaining nicely&clearly done, step-by-step, in just 12 minutes.
Graćias & blessing$.

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