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Preparing Excel Templates for Financial Statements

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Financial statements, which are composed of the income statement, cash flow statement, and balance sheet, are financial records of business activities and performance. Financial statements also serve as a financial planning tool for decision-making, investment, and acquisition purposes. The excel templates for three financial statements are interconnected but provided different information. Let’s evaluate the three financial statements below.

 

The Three Financial Statements

Shown in the figure below is a sample of three financial statements in a 10-year projection period.

1.            Income Statement

Income statement records sales, operating, and non-operating expenses. COGS (cost of goods sold) is subtracted from sales to generate gross profit. Gross profit is then further deducted by selling and administrative expenses, and then you get EBITDA (Earnings before Interest, Tax, Depreciation, Amortization). EBITDA is an excellent comparative figure of your company to peer competitors and industry average, which helps you assess which your business stands in terms of profitability.

EBITDA less interest, tax, depreciation, and amortization, gives you the net income. Net income is the accounting profitability of your business. It can be different from your peer competitor, given the difference in your company’s capital structures and the competitors.

 

2.            Cash Flow Statement

A cash flow statement is an indispensable tool in determining your business capability to meet day-to-day financial obligations. This statement helps you plan your cash movements and be able to receive cash on time in paying for your suppliers, staff salaries, rent, and other short-term obligations. The three cash flow types are Cash Flow from Operation, Cash Flow from Financing Activities, and Cash Flow from Investing Activities.

a.    Cash Flow from Operation

Cash flows from operation include cash sales and other income sources, then paying for purchases, salaries, rent, and other operating expenses.

b.    Cash Flow from Investing Activities

It includes the acquisition and sale of machinery and equipment, vehicle, and building/building improvements.

c.    Cash Flow from Financing Activities

Cash flows from financing activities are your investment, loan proceeds, and grants (if any). Cash outflows are loan repayments, interest payments, and dividend payouts.

3.            Balance Sheet

A balance sheet entails the financial position of your business. It constitutes the Assets, Liabilities, and Equity Sections, wherein Assets = Liabilities + Equity.

Current assets include cash, accounts receivable, inventory, prepaid expenses. Non-current assets are building/building improvements, machinery and equipment, and biological assets (if any).

Current liabilities are short-term obligations or those less than a year, such as payable to vendors and suppliers, part of loan repayments, and tax liabilities. Non-current liabilities are long-term financial obligations or those maturing in more than a year.

Equity sections include your investment, loan proceeds, and shareholders’ capital.

 

The excel templates financial statements are the fundamental financial planning tool for business decision-making purposes, investment, purchase, or sale. It transmits in number the business status and potential for the proposed investment.

 

 

 

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