Financial Management & Digital Accounting · Beginner level

Beginner level · Module 3 of 5 · 11 guided hours

Income Statements and Cash Flow

Summarise performance in an income statement and forecast cash to avoid running out.

Learning objectives

  • Prepare a simple income statement
  • Explain the difference between profit and cash
  • Prepare a three-month cash flow forecast

Topics

  • income statement format
  • gross and net profit
  • profit vs cash
  • credit sales and purchases
  • cash flow forecast
  • cash gaps

Lessons

  1. Lesson 1 The Income Statement

    Summarise a period's income and expenses to show profit or loss.

    revenuecost of goods soldgross profitnet profit

  2. Lesson 2 Profit Is Not Cash

    Understand why a profitable organisation can still run out of cash.

    credit salescredit purchasesstocktiming

  3. Lesson 3 Cash Flow Forecasting

    Forecast cash month by month to see shortages before they happen.

    cash inflowscash outflowsopening and closing cashcash gap

Practical activity

Prepare the month's income statement and a three-month cash flow forecast for the shop.

Expected outcomes

  • Clear performance summaries
  • Early warning of cash shortages

Assessment

Income statement and forecast checked for format, accuracy and insight.

Free taster lesson Financial Reporting & Cash Flow Management Read a free self-study lesson on this topic in the Free Course Library.

Taught live by an instructor — online or in person. Free course lessons are for self-study and do not lead to a certificate — see registration options.