Learn how financial statements work with a downloadable example, try a cash forecast or get one-to-one help with Excel.
Follow a one-person print studio from opening balances and transactions to a trial balance, financial statements and simple ratios. Edit the yellow cells to see how the figures change.
Plan when customers will pay and see whether your business has enough cash each month.
Use the enquiry form to ask for the price and delivery details. Enter “12-month cash flow forecast” in the subject field.
Enquire about the cash flow forecastFollow a fictional print studio run by a sole trader, one person running their own business. The free workbook’s six numbered tabs take you from opening balances to month-end checks.
Start on tab 1 with the amounts brought forward from the previous month. Each transaction records a debit account, a credit account and an amount. Tab 2 adds up the entries by account after the depreciation adjustment. Both debit and credit totals come to £32,500. You still need to check that transactions are complete and in the right accounts.
For example, when the studio invoices a customer, debit Trade receivables and credit Sales. When the customer pays, debit Cash and credit Trade receivables. The second entry collects the money for the sale already recorded.
Closing figures before transferring profit and drawings to owner’s capital. The example assumes opening equipment cost of £4,000 and no opening accumulated depreciation.
| Account | Debit | Credit |
|---|---|---|
| Cash | £9,400 | — |
| Trade receivables | £3,000 | — |
| Inventory | £1,500 | — |
| Equipment at cost | £7,000 | — |
| Accumulated depreciation | — | £600 |
| Trade payables | — | £1,900 |
| Loan | — | £6,000 |
| Opening capital | — | £9,000 |
| Sales | — | £15,000 |
| Cost of sales | £5,500 | — |
| Operating costs | £4,500 | — |
| Depreciation expense | £600 | — |
| Interest expense | £200 | — |
| Owner drawings | £800 | — |
| Total | £32,500 | £32,500 |
Take sales and expenses from the trial balance. £15,000 of sales less £5,500 of cost of sales gives £9,500 gross profit. Subtract operating costs, depreciation and interest to get £4,200 profit for the month. The owner’s personal tax is outside this example.
Group closing balances into assets, liabilities and owner’s capital. Equipment of £7,000 less £600 accumulated depreciation leaves £6,400. Start with £9,000 opening capital, add £4,200 profit and subtract £800 of drawings, the cash the owner took for personal use. Closing assets of £20,300 equal £7,900 of liabilities plus £12,400 of closing capital.
Start with £4,200 profit. Add back £600 depreciation, subtract £2,000 of extra unpaid invoices and £500 of extra stock, then add £900 of extra unpaid supplier bills. That gives £3,200 cash from operations. Subtract £3,000 for equipment, add £4,000 of new borrowing and subtract £800 of drawings. Cash rose by £3,400 from £6,000 to £9,400, matching the balance sheet.
See the linked calculations on tab 6, or try these shorter formulas in spare cells on the relevant statement.
=B8/B6 gives 63.3%.=B13/B6 gives 28.0%.=SUM(B6:B8)/B11 gives 7.32, assuming the loan is due after 12 months.On tab 1, reduce Customer payments from £2,000 to £1,500. Profit stays at £4,200 and closing cash falls to £8,900. The checks on tab 6 still give zero.
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