Have you looked at a cash flow report recently? If you have, you probably fell into one of two camps:
- You’re a seasoned finance professional and you’ve learned (over years of hands-on experience) how to wrestle some meaning out of it.
- You’re a CEO or some other “normal” business person and the report left you completely befuddled.
Either way, you have to know there’s a better way. We’ve come so far in financial reporting and business intelligence ‒ so why do our cash flow reports still feel like they’re written in some jargon-filled foreign language?
And the really strange thing is that it shouldn’t be like this at all. Cash flow is really pretty simple: Where did our cash come from during a given period and where did it go? And, of course, what is our current cash position?
Finally there’s a cash flow report that makes it that simple, and it’s called the Cash Waterfall.
No, your eyes are not fooling you ‒ it’s really that simple. The green represents your cash in (from revenue and interest payments, in this case) and the red reflects your cash out (mostly salaries, facility costs and prepaid expenses). The difference is your cash position for the time period shown.
Whether you’re a lifelong finance person or a CEO just trying to understand your company’s current cash position, the Cash Waterfall is the one report you really need.
If you want to learn more about the Cash Waterfall, download our FREE one-page guide.