How to Make a Cash Flow Chart? Easy to Follow Steps

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 follow to get started with a Cash Flow Diagram generator. You’ll also come across a ton of easy-to-follow Cash Flow Diagram examples to simplify everything.

So if your Google Sheets 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.

You don’t want to miss the meaty part of the blog.

How to Create a Cash Flow Chart?

Before we delve into the how-to guide, let’s go through the definition of cash flow.

What is a Cash Flow Chart?

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.

And 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.

Importance of a Cash Flow Chart

As we said, a Cash Flow Diagram is an essential element of your financial analysis.

And this implies you need a proper and easy-to-interpret Cash Flow Diagram to go beyond the surface of your data and uncover hidden insights.

Visualizing your Cash Flow data requires specialized charts specifically designed for this job. However, popular spreadsheet tools, such as Google Sheets, lack this chart.

This is where a Cash Flow generator comes in.

How to Calculate Cash Flow?

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’re three formulas you can use to determine the liquidity position of your business, namely.

• Free Cash Flow
• Operating cash
• Cash Flow Forecast

Let’s go through the cash flow diagram examples below.

1. Free Cash Flow Formula

One of the significant cash flow formulas is Free Cash Flow (FCF).

While a traditional cash flow statement provides you 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.

• Net income

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/Amortization

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

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

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.

Free Cash Flow = Net income + Depreciation/Amortization – Change in Working Capital – Capital Expenditure.

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.

Operating Cash Flow Formula

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, earning, 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?

Operating Income

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:

Operating Cash Flow = Operating Income + Depreciation – Taxes + Change in Working Capital

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.

Cash Flow Forecast Formula

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.

Cash Flow Forecast = Beginning Cash + Projected Inflows – Projected Outflows = Ending Cash.

• Beginning cash

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 Inflows and Outflows

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 (which we’ll discuss later). If you haven’t install it yet you can install it by clicking below for your desired tool for Excel or for Google Sheets.

How to Make A Cash Flow Chart?

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, lack Cash Flow Charts, best suited to handle this type of data.

This does not mean you should ditch Google Sheets.

There’s a way to supercharge this tool 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 the best Cash Flow Diagram generator (add-on) we recommend is ChartExpo.

Keep reading to know why we recommend this Cash Flow Chart generator.

ChartExpo: Cash Flow Diagram 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.

How to make Cash Flow Diagrams in Google Sheets?

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.

• Grouped Column Charts

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:

• Install ChartExpo
• Open the worksheet and click the Add-ons menu button.
• Once the ChartExpo-Best Data Visualization Tool drop-down menu shows, click the Open button.

• Once it is opened, you can put your data in sheet and then click the Create New Chart button.

• By default you will list of charts but on the top right corner you can click on categories to see the charts under specific categories.
• You’ll see 6 main categories of spreadsheet charts and graphs.
• Click the PPC Chart button to access Grouped Column Charts.

• Select the sheet holding your data.
• Fill in your metrics and dimensions, as shown below.
• In our example, the key metrics to fill in are cash Balance and net cash flow. Conversely, put the month variable in the dimension section.

• Complete the task (above) using the Grouped Column Chart (one of the best Cash Flow Chart) by clicking the Create Chart button.
• If you follow the super-easy steps (above), your final chart should look like this (below).

Insights

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.

• Sentiment Trend Chart

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:

• Click the Sentiment Analysis Charts button to access the Sentiment Trend Chart in your Google Sheets.

• Select the sheet holding your data.
• Fill in your metrics and dimensions, as shown.
• In our example, the key metrics to fill in are the cash balance and net cash flow. Conversely, fill in the following variable in the dimension section:

• Finish the task (above) using the Sentiment Trend Chart (one of the best Cash Flow Chart) by clicking the Create Chart button.

Insights

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.

How to make Cash Flow Charts in Excel?

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:

• Copy the table (above) into your Excel
• Open the worksheet and click on the Insert menu button.
• Click the My Apps option and then click the See All button.

Click the ChartExpo button and then click the Insert button to start the installation.

After this add-in is inserted you will see following list of charts.

You will find the first chart as Sankey in the list, but if you are unable to find this chart, you can search in search bar or you can click on Category button to see the list of chart categories and from there you can find the Sankey Chart.

Once Sankey Chart is clicked you will see its new window where you can then you can select your sheet data and click on “Create Chart From Selection”.

You will immediately see your data to be converted to Sankey visualization.

You will find Edit Chart option to change the properties of your nodes to change the colors, add heading on chart, add prefix and post fix with the data and eventually you will find following look for your cash flow diagram example with Sankey visualization.

Insights

The aggregate salary is $5.26k, and the total passive income is $696, making the total income to be $5.96k. You can easily track each coin coming in and out of the business.

Core expenses and deductions account for a 73% reduction in total income. Conversely, disposable income and financial independence contribute only 23% growth in total revenue.

FAQs:

How can you make a Cash Flow Diagram in Excel?

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.

What is a Cash Flow Diagram?

Cash Flow Diagrams visually represent the money coming in and out of your business in a specified time. Use these charts to extract actionable, in-depth insights into your financial data without wasting time.

Data visualization experts recommend Column Grouped, Sankey, and Sentiment Trend Charts as your go-to visualization designs.

What are the 3 types of cash flows?

The statement of cash flows presents sources and uses of cash in your business. There’re three unique formulas you can use to determine the cash flow position of your business. And they include:

• Cash Flow Forecast
• Free Cash Flow
• Operating Cash Flow

Wrap Up

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.