Cash flow statement
In very general terms, 'cash flow' is the movement of income into and expenditure out of a business (or other entity) over time. If more money is coming into the business than is going out of it, cash flow is said to be 'positive'. If more money is going out, this is negative cash flow.
In construction however, the term 'cash flow' typically refers to an analysis of when costs will be incurred and how much they will amount to during the life of a project.
A cash flow statement (or statement of cash flows), is a reporting mechanism used to show the amount of cash (and cash equivalents) going in (cash inflow) and out (cash outflow) of a business or project. In basic terms, the cash flow statement sets out the extent to which the business or project has enough cash to fund its operating expenses and meet its debt obligations.
In accounting, the cash flow statement is often used to complement the balance sheet and income statement, and is helpful for determining short-term viability. It also helps provide an indication of the amount and timing of future cash flows.
The cash flow statement is typically split into three areas:
- Cash flow from operating activities (production, sales, delivery, purchasing, shipping, and so on).
- Cash flow from investing activities (purchase or sale of assets, loans made or received, payments related to mergers and acquisition).
- Cash flow from financing activities (inflow from investors, outflow as dividends to shareholders, and so on).
Guidance is available from RICS about cash flow forecasting in the construction industry. http://www.rics.org/uk/knowledge/professional-guidance/black-book/cash-flow-forecasting-1st-edition-black-book/
NB The Chartered Institute of Procurement & Supply (CIPS) Glossary of procurement terms, defines cash flow as: ‘The amount of money moving in and out of a business in a particular period.’ It defines a cash flow statement as: ‘An accounting document that summarises the incomings and outgoings of cash in an organisation.’
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
The 5 elements of seiri, seiton, seiso, seiketsu and shitsuke.
Shading for housing, a design guide
A look back at embedding a new culture of shading.
The Architectural Technology Awards
The AT Awards 2025 are open for entries!
ECA Blueprint for Electrification
The 'mosaic of interconnected challenges' and how to deliver the UK’s Transition to Clean Power.
Grenfell Tower Principal Contractor Award notice
Tower repair and maintenance contractor announced as demolition contractor.
Passivhaus social homes benefit from heat pump service
Sixteen new homes designed and built to achieve Passivhaus constructed in Dumfries & Galloway.
CABE Publishes Results of 2025 Building Control Survey
Concern over lack of understanding of how roles have changed since the introduction of the BSA 2022.
British Architectural Sculpture 1851-1951
A rich heritage of decorative and figurative sculpture. Book review.
A programme to tackle the lack of diversity.
Independent Building Control review panel
Five members of the newly established, Grenfell Tower Inquiry recommended, panel appointed.
Welsh Recharging Electrical Skills Charter progresses
ECA progressing on the ‘asks’ of the Recharging Electrical Skills Charter at the Senedd in Wales.
A brief history from 1890s to 2020s.
CIOB and CORBON combine forces
To elevate professional standards in Nigeria’s construction industry.
Amendment to the GB Energy Bill welcomed by ECA
Move prevents nationally-owned energy company from investing in solar panels produced by modern slavery.
Gregor Harvie argues that AI is state-sanctioned theft of IP.
Experimental AI housing target help for councils
Experimental AI could help councils meet housing targets by digitising records.
BSRIA Occupant Wellbeing survey BOW
Occupant satisfaction and wellbeing tool inc. physical environment, indoor facilities, functionality and accessibility.