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You’ll agree when we say a cash flow chart is one of the most significant tools in a business.
Why?
Well, this chart shows what your business does with money earned. Besides, it can help you streamline internal operations and make data-backed strategic decisions.
Creating Cash Flow Diagrams does not have to be time-consuming and complex. Yes, you read that right.
This blog will walk you through simple steps to start with a Cash Flow Diagram generator. You’ll also come across a ton of easy-to-follow Cash Flow Diagram examples to simplify everything.
If you’re using Google Sheets or Excel, which doesn’t have a Cash Flow Chart functionality built-in, fret not. The secret is to leverage an intelligent and affordable application, which we’ll talk about later. In this blog you will learn:
Before we delve into the how-to guide, let’s go through the definition of cash flow.
Definition: A Cash Flow Statement (also known as the Statement of Cash Flows) summarizes the amount of cash and cash equivalents entering and leaving your business.
Besides, it measures how well your business is managing its cash position or how efficiently your business meets its debt obligations and funds its operating expenses. This statement complements the balance sheet and income statement and is a mandatory part of a company’s financial reports.
Remember, a Cash Flow Statement is just a table with figures. Imagine trying to derive insights from Cash Flow Statements dating back, let’s say, two previous financial years. The table would likely be long and intimidating due to the volume of data.
This means for you to extract actionable insights from your cash flow statement, you have to use charts and graphs.
This is where a Cash Flow Chart comes in.
Like we said earlier, if your visualization tool lacks an inbuilt Cash Flow Diagram, worry not. In a moment, we’ll be discussing an easy-to-use Cash Flow Diagram generator you can use to visualize your financial data.
Like the Balance Sheet, the Cash Flow Diagram provides information on the financial health of your business. More so, it’s the go-to piece of information for investors with intentions to increase their equity in your business.
So what’s Cash Flow?
Cash flow is the net amount of cash and cash equivalents going in and out of your business.
It’s made up of two key components: cash received and spent.
Cash received represents inflows, while money spent represents outflows. Your business’s ability to create value for investors is fundamentally determined by its ability to generate positive free cash flows.
Free Cash Flow is the cash your business generates from its operations after deducting capital expenditures.
Let’s take a quick look at a Cash Flow Diagram example and its essential components.
Definition: A Cash Flow Chart is a visual representation of the inflows and outflows of cash within a business or project over a specific period. It helps illustrate how money is generated and spent, providing a clear overview of financial health and liquidity.
By tracking cash movement, the chart assists in identifying trends, managing project budgets, and ensuring sufficient cash availability for operational needs.
As we said, a Money Flow Diagram is an essential element of your financial analysis.
This implies you need a proper and easy-to-interpret Money Flow Diagram to go beyond the surface of your data and uncover hidden insights.
Visualizing your Money Flow data, or even using a chart to show profit and loss, requires specialized charts specifically designed for this job. However, popular spreadsheet tools, such as Google Sheets, lack this chart.
In theory, a cash flow is just a reflection of how money moves into and out of your business. But for most small business owners, the simplicity ends there.
You need to develop a deep understanding of cash flow because it can make or break your business.
So how is cash flow calculated?
There are three formulas you can use to determine the liquidity position of your business, namely.
Let’s go through the cash flow diagram examples below.
One of the significant cash flow formulas is Free Cash Flow (FCF).
While a traditional cash flow statement provides you with a picture of your business’s financial health at a given time, it doesn’t truly reflect the cash available or free to use.
Calculating your business’ free cash flow is easier than you might think. Besides, using a cash flow chart generator is even easier if your goal is to uncover high-level insights.
You need an income statement or balance sheet to get critical data points.
Let’s go through the components of a Free Cash Flow formula.
The net income is the total income left over after you’ve deducted your business expenses from total revenue or sales. Get this data from your Income Statement.
Depreciation is the measurement of how your business’ assets decrease in value. Conversely, amortization is a method of breaking down the initial cost of an asset over its lifetime.
Get this data from your income statement.
Working Capital is the difference between your assets and liabilities. And it represents the capital used in the day-to-day operation of your business.
Get working capital data from the balance sheet.
Capital Expenditure is the money your business spends on fixed assets, like land, real estate, or equipment. Get this data from the statement of cash flows.
Check out the complete formula (of Free Cash Flow) below.
Let’s take a look at a Cash Flow Diagram example in the real world.
Imagine you run a freelance graphic design business. You want to calculate your free cash flow to determine if hiring a virtual assistant (for 10 hours a month) is financially feasible.
Let’s assume the data below represents the financial position of your freelance business.
Net income = $150,000
Depreciation/Amortization = $0
Change in Working Capital = – $20,000
Capital Expenditure = $3,500 (You bought a new iMac last year)
So your free cash flow is represented by:
[$150,000] + [$0] – [$20,000] – [$3,500] = $126,500
That means the business has $126,500 available and can sustain the hiring of a virtual assistant.
While Free Cash Flow provides insights into cash available to reinvest in the business, it doesn’t always show the most accurate picture of everyday cash flow.
And this is because the FCF formula doesn’t account for irregular spending, earnings, or investments. For instance, your free cash flow will go through the roof if you sell off a large asset. But, this does not reflect the typical cash flow for your business.
Just as with our Free Cash Flow formula above, get your balance sheet and income statement ready to pull out key data points.
In addition, there’s one other financial metric (that’s missing in Free Cash Flow) you’ll need to know.
So what is this new metric?
The Operating Income (also called Earnings before Interest and Taxes (or EBIT) is the difference between operating expenses (like wages paid and cost of goods sold) and total revenue.
Get operating income data from your Income Statement.
Check out our Operating Cash flow formula below:
You can visualize this data (Operating Cash Flow Statement) using the Cash Flow Charts we’ll talk about later.
You don’t want to miss this.
Take a look at the Operating Cash Flow Diagram example in the real world. Note: the data used are hypothetical.
Operating Income = $75,000
Depreciation = $0
Taxes = $11,000
Change in Working Capital = – $19,000
Your operating cash flow formula is represented by:
[$75,000] + [$0] – [$11,000] + [-$19,000] = $45,000
The (above) means that the hypothetical business generates $45,000 in positive cash flow in a typical year.
While both Free Cash Flow (FCF) and Operating Cash Flow (OCF) methodologies provide insights into cash flow of your business in a given period: you cannot use them to plan for the future.
This is where a Cash Flow Forecast formula comes in.
Cash Flow Forecast is one of the easiest formulas to calculate. And this is because you’ll not come across complex financial metrics.
It’s just a simple calculation of the cash you expect to bring in and spend over (typically) the next 30 or 90 days.
Check out the formula below.
Beginning Cash is the amount of money you start with at any given time. You can get this data from your Statement of Cash Flows.
Projected inflow is the money your business expects in a given period. And it’s made up of current and future invoices you wish to send and receive.
On the other hand, projected outflows are the expenses and other payments you’ll make in the given timeframe.
Take a look at a Cash Flow example.
Beginning cash = $60,000
Projected inflows for the next 90 days = $20,000
Project outflows for the next 90 days = $10,000
Here’s what your cash flow forecast looks like:
[$60,000] + [$20,000] – [$10,000] = $70,000
The (above) means the forecasted cash flow (for the hypothetical business) for the upcoming quarter is $56,000.
Remember, you can visualize this data using a Cash Flow Diagram generator.
A Cash Flow Diagram Generator is a tool or software that helps create visual representations of cash flows over time. It typically displays inflows and outflows as bars or arrows on a timeline, making it easier to understand the movement of cash within a business or project.
This tool is useful for financial planning, budgeting, and investment analysis, allowing users to assess the timing and amounts of cash receipts and payments.
As we said, charts can help you access hidden and high-level insights from your Cash Flow Statement table.
A Cash Flow Chart paints a clear picture of the financial position of your business by providing in-depth and actionable insights.
Getting these insights from typical Cash Flow Statements is not easy, especially if the tables are super long.
Besides, freemium visualization tools, such as Google Sheets and Excel, lack Cash Flow Charts, best suited to handle this type of data.
This does not mean you should ditch Google Sheets & Excel.
There’s a way to supercharge these tools with third-party tools to get the most from your financial data. We’ve tried a ton of data visualization add-ons available, specifically for Google Sheets and Excel. And the best Cash Flow Diagram generator (add-on) we recommend is ChartExpo.
Keep reading to know why we recommend this Cash Flow Chart generator.
As we said in the previous section, ChartExpo is the tool we recommend to our clients and readers. Why?
This super easy-to-use tool does not require coding or programming skills, unlike other add-ons. More so, this Cash Flow Diagram generator add-on for Google Sheets has an ultra-friendly UI for everyone to use. ChartExpo has 50-plus advanced charts to offset the missing ones.
ChartExpo is the tool you need to produce Cash Flow Charts that are incredibly easy to read and understand. If you haven’t installed it yet you can install it by clicking below for your desired tool for Excel or Google Sheets and start creating this chart in a few clicks without any coding.
Excel is one of the most popular data visualization tools around. Besides, it has been there for decades, which makes it familiar to many.
However, this spreadsheet tool has pretty basic diagrams, which are ill-suited to visualize Cash Flow Statements. You can supercharge this tool with the ChartExpo add-in to access easy-to-read and intuitive Cash Flow Charts.
Take a look at a Cash Flow Diagram example below to get started with the ChartExpo add-in for Excel.
We’ll use the tabular data below.
| Income Source | Income Type | Income | Spending Source | Spending Type | Amount |
| Salary | Earned Income | Income | Deduction | Income Tax | 494 |
| Salary | Earned Income | Income | Deduction | Social Justice | 677 |
| Salary | Earned Income | Income | Core Expenses | Bill Expenses | 758 |
| Salary | Earned Income | Income | Core Expenses | Food | 933 |
| Salary | Earned Income | Income | Core Expenses | Personal Care | 649 |
| Salary | Earned Income | Income | Core Expenses | Transportation | 825 |
| Salary | Earned Income | Income | Financial Independence | Pension | 536 |
| Salary | Earned Income | Income | Financial Independence | Investment | 392 |
| Credit Card Reward | Passive Income | Income | Financial Independence | Real Estate | 287 |
| Dividends | Passive income | Income | Disposable Income | Emergency Fund | 262 |
| Interest | Passive income | Income | Disposable Income | Leisure | 147 |
To get started with our Cash Flow generator ChartExpo for Excel, follow the simple instructions below:
This section is loaded with tons of Cash Flow Diagram examples to get you started with this visualization as quickly as possible.
Let’s go through a Cash Flow Diagram example below.
Imagine you want insights into how your net cash flow compares to cash balance for planning purposes.
Where would you start?
This is where one of the best Cash Flow Charts (Grouped Column Charts) comes in. Let’s use the tabular data below for our scenario.
| Months | Cash Balance | Net Cash Flow |
| Jan | 3097 | 856 |
| Feb | 3657 | 809 |
| Mar | 3094 | 829 |
| Apr | 2896 | 709 |
| May | 3671 | 791 |
| Jun | 4038 | 2700 |
| Jul | 3213 | 790 |
| Aug | 2770 | 791 |
| Sep | 3704 | 720 |
| Oct | 3390 | 790 |
| Nov | 3035 | 749 |
| Dec | 3168 | 703 |
To get started with our Cash Flow Diagram generator (ChartExpo), follow the simple steps below:
Do you find the chart above easy to read?
In June, the operating expenses were unusually high compared to other months. So this month qualifies to be labeled an outlier.
Let’s use our Cash Flow Chart generator (ChartExpo) to visualize the same data table (above). But, in this cash flow diagram example, we’ll use a different chart (Sentiment Trend).
The Sentiment Trend Diagram is one of the most recommended, especially if you want high-level insights from Cash Flow tables.
To get started with ChartExpo add-on, follow the simple steps below:
June has the highest cash balance and net cash flow. The other months share a similar trend in cash balance with minor ups and downs.
Divide your cash flow chart into clear categories such as operating activities, investing activities, and financing activities. This makes it easier to understand the sources and uses of cash.
Avoid overcrowding the chart with too much data. Focus on the most important cash flows that reflect the financial health of your business.
Utilize color coding to differentiate between positive (inflows) and negative (outflows) cash flows. This will make it easier for viewers to quickly identify trends.
Make sure to show time periods clearly (daily, monthly, quarterly, etc.), so users can easily track the cash flow over time and identify patterns.
Ensure that all entries on the chart are labeled clearly with descriptions. This helps eliminate confusion and enhances the chart’s utility.
Excel spreadsheet comes with pretty basic charts that cannot provide high-level insights from a Cash Flow Statement.
You can supercharge Excel with third-party tools (add-ins), such as ChartExpo, to access easy-to-read and insightful Cash Flow Charts. Accessing Cash Flow Diagrams should never stress you.
The statement of cash flows presents sources and uses of cash in your business. There are three unique formulas you can use to determine the cash flow position of your business. They include:
How to create a Cash Flow Chart using either Google Sheets or Excel does not have to consume your valuable time or even overwhelm you.
Besides, if you’ve outgrown the basic spreadsheet charts (offered by Google and Excel), it’s time to give tested and proven third-party apps, such as ChartExpo to get the most from your financial data.
ChartExpo is incredibly easy to use, produces insightful and straightforward charts, and most importantly, has over 50-plus advanced charts.
Give Cash Flow Diagram generator – ChartExpo a try today to get unlimited access to high-level insights from your Cash Flow Statement today.
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