Simplify – Cash Flow and Business Health Drivers
- Ed Patton
- Sep 30
- 2 min read
Updated: Oct 1
Understanding cash flow and financial health is difficult for many SMB leaders because the traditional methods of reporting these are ineffective and often not utilized.
The link below is a spreadsheet which provides a first step to fix this.
It calculates your business’s cash changes and Foundation Cash Flow (FCF), which is the primary driver of a business’s financial health.
Spreadsheet completion…simply fill in the light blue cells with the described amounts from your company’s standard balance sheet.
The spreadsheet will calculate FCF and cash changes.
Interestingly, the information in these calculations is all from balance sheets amounts.
No P&L data
No Ops data
This is mentioned because it helps show the important insights derived from often overlooked or misunderstood balance sheet data.
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Financial insights are derived from properly engaging the “top half” and the “bottom half” of a balance sheet.
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The next step to have clear and concise financial fundamentals is the Trender® reporting package…which is outside the scope of this article.
The Trender cash flow statement segregates FCF into amounts from operations and non-ops.
Line item working capital amounts are also shown on the Trender cash flow statement.
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The Trenders provide an awareness of what is driving financial fundamentals, including cash flow and changes in financial health.
Insightful data exists in every company’s standard accounting / financial reporting data.
Clear and concise financial fundamentals are derived when they are properly reported.
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A strong understanding of cash flow and financial health enhances management’s comprehension of their business.
A grasp of whether a company is making or losing money, and how much, is management's gateway to understanding their business's full financial profile.
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Reach out for an introductory phone or video call to discuss how succinct and understandable financial fundamentals have helped the leaders of many privately owned businesses.
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Edward B. Patton
5701 Broadway, Suite 102
San Antonio, Texas 78209
Phone (210) 822-9977