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Statement of Cash Flow - Forecast - Direct Method

The Statement of Cash Flow - Direct Method with Forecast report provides a detailed breakdown of cash inflows and outflows from operating, investing, and financing activities. Unlike the indirect method, this report presents cash transactions directly, making it easier to understand the sources and uses of cash. Additionally, it includes forecasted cash flows, allowing organizations to anticipate future financial positions and plan accordingly.

This report is divided into the following sections:

  1. Operating Activities – Tracks cash received from revenue sources (e.g., services, contributions, grants) and cash paid for operating expenses (e.g., suppliers, salaries, inventory).
  2. Investing Activities – Covers cash spent on or generated from capital expenditures, investments, and asset purchases.
  3. Financing Activities – Details cash inflows from debt proceeds or outflows from loan repayments and other financial obligations.

Additionally, this report includes variance analysis, comparing actual cash flows with forecasts to identify deviations and improve financial planning.

Key Performance Indicators (KPIs) and Descriptions​

1. Net Cash Provided by (Used in) Operating Activities​

  • Definition: The total cash flow from operations, calculated as cash received from revenue sources minus cash paid for expenses.
  • Purpose: Indicates the organization's ability to generate cash from core activities and cover operational costs.

2. Variance Between Actual and Forecasted Cash Flows​

  • Definition: The difference between actual and projected cash flow amounts.
  • Purpose: Helps organizations assess forecasting accuracy and make necessary financial adjustments.

3. Cash Received from Revenue Sources​

  • Definition: The actual and projected cash inflows from services, contributions, grants, and other sources.
  • Purpose: Helps organizations track whether revenue collection aligns with expectations.

4. Total Cash Paid to Employee Suppliers​

  • Definition: The sum of cash outflows for employee payments, supplier expenses, accounts payable, inventory, and other liabilities.
  • Purpose: Measures the organization’s expenditure trends and ensures spending aligns with forecasts.

5. Net Cash Provided by (Used in) Investing Activities​

  • Definition: The total cash inflows or outflows related to capital expenditures, investments, and asset purchases.
  • Purpose: Evaluates how investment decisions affect the organization's cash flow position.

6. Net Cash Provided by (Used in) Financing Activities​

  • Definition: The net cash impact of financing transactions, such as debt proceeds or repayments.
  • Purpose: Highlights how external financing contributes to liquidity management.
  • Definition: The month-over-month or quarter-over-quarter projections of cash inflows and outflows.
  • Purpose: Provides a forward-looking view of cash availability, helping organizations prepare for potential liquidity challenges.

8. Net Increase (Decrease) in Cash and Cash Equivalents​

  • Definition: The overall change in cash over the reporting period, including future projections.
  • Purpose: Helps assess whether the organization's cash reserves are growing or shrinking.

9. Cash at Beginning of Period​

  • Definition: The starting cash balance at the beginning of the reporting period.
  • Purpose: Serves as a baseline for evaluating cash flow changes over time.

10. Cash at End of Period​

  • Definition: The forecasted cash balance at the end of the reporting period.
  • Purpose: Ensures sufficient liquidity to meet upcoming financial obligations and strategic goals.

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