What is this page about: The Cash Flow Statement in Light shows how cash moved into, out of, and between the operating, investing, and financing activities of your business over a period. This page explains what the statement covers, how to generate and export it, how operating cash flow is calculated, and how to compare cash flow across periods, entities, and currencies.
On this page
- What is a cash flow statement?
- How do I access the cash flow statement in Light?
- How is the cash flow statement laid out?
- How does operating cash flow work?
- How does investment cash flow work?
- How does financing cash flow work?
- How do I compare cash flow across periods?
- How does multi-entity cash flow work?
- How does multi-currency cash flow work?
- How do I export the cash flow statement?
- Frequently asked questions
What is a cash flow statement?
A cash flow statement shows how cash moved into, out of, and between the operating, investing, and financing activities of your business over a period. In Light, the Cash Flow Statement is generated directly from your ledger. While the P&L shows profit or loss, the cash flow statement shows actual cash movements — understanding the difference matters because a profitable company can still fail if it doesn't manage cash effectively.
The statement organizes cash flows into three sections:
Operating activities: Cash generated from core business operations. Light uses the indirect method, starting from net income and adjusting for changes in working capital — receivables, payables, inventories, and other working capital. This shows whether operations generate sufficient cash to fund the business.
Investing activities: Cash used to buy or sell long-term assets, shown as a single net Investment in Fixed Assets line (purchases and sales of tangible and intangible fixed assets net against each other). This shows capital expenditure and investment strategy.
Financing activities: Cash from or used for financing the business, shown across Long term liabilities, Fundraising, Dividends, and Other equity. This shows how you fund your business.
The statement starts from net income, shows the cash movements from the three activity categories, and ends with the total cash movement for the period, which matches the change in cash on your balance sheet.
Good to know: A profitable company can have negative cash flow if it collects receivables slowly or invests heavily in assets.
How do I access the cash flow statement in Light?
Generate your cash flow statement in four steps:
- Navigate to Planning & Reports → Reports
- Select a date range for the period you want to report on
- Select entities to include (single entity or consolidated)
- Select the currency view: Entity Crcy (local currency) or Group Crcy (group currency)
Light renders the cash flow statement automatically as you set these filters, there's no separate button to click, organized by operating, investing, and financing activities.
How is the cash flow statement laid out?
Light's cash flow statement is presented as a fixed set of lines:
- Net income — the starting point, pulled from the P&L
- Cashflow from operating activities — with sub-lines Change in Accounts Receivable, Change in Accounts Payable, Change in Inventories, and Change in Other working capital
- Cashflow from investment activities — with a single sub-line, Investment in Fixed Assets
- Cashflow from financing activities — with sub-lines Long term liabilities, Fundraising, Dividends, and Other equity
- Cash Movement — the total change in cash for the period
- Check — a reconciliation row confirming the movement ties out
You can calculate any additional summary ratios (such as free cash flow or coverage ratios) yourself from the line items above — Light doesn't calculate those on top of this statement.
How does operating cash flow work?
Operating cash flow shows cash generated from your core business. Light uses the indirect method: the statement starts with net income from the P&L and adjusts for changes in working capital:
- Change in accounts receivable: increase in receivables = cash outflow (more time to collect), decrease = cash inflow (faster collection)
- Change in accounts payable: increase in payables = cash inflow (more time to pay), decrease = cash outflow (earlier payment)
- Change in inventories: increase in inventory = cash outflow (more inventory purchased), decrease = cash inflow (inventory sold)
- Change in other working capital
Light automatically calculates these adjustments from your ledger.
Tip: Operating cash flow should generally be positive and greater than net income. If operating cash flow is negative, investigate why.
How does investment cash flow work?
Investment cash flow shows capital expenditure on long-term assets. Light presents it as a single net line, Investment in Fixed Assets, which combines purchases and sales of tangible and intangible fixed assets — asset sales reduce the line rather than appearing as a separate row. Light derives this from period-over-period changes in your fixed-asset account balances. Long-term investments and loans to customers or related parties are tracked under operating cash flow's Change in Other working capital line, not in this investing section. This section shows cash available for debt repayment and dividends.
How does financing cash flow work?
Financing cash flow shows how you raise and deploy capital. Light presents it across four lines:
- Long term liabilities — the net change in debt (new borrowing less repayments)
- Fundraising — contributed and share capital
- Dividends — distributions from retained earnings
- Other equity — other equity movements
Light derives these from period-over-period changes in your debt and equity account balances, so there's nothing to enter manually. This shows how your capital structure evolves.
How do I compare cash flow across periods?
Compare cash flow to prior periods:
- Navigate to Planning & Reports → Reports
- Select a comparison period: 1, 3, 6, 9, or 12 months, or 1, 2, or 3 years back
- Light displays cash flows side-by-side
- Click most lines to drill into the underlying transactions — aggregate totals like the Check row, and any percentage columns, don't drill down
This identifies cash flow trends and movements.
How does multi-entity cash flow work?
For organizations with multiple entities, Light lets you:
- Generate cash flow for each subsidiary
- Generate consolidated cash flow combining all entities
- Eliminate inter-company cash flows
- Analyze cash generation by entity
For inter-company documents set up for elimination, Light removes the internal cash flows automatically, so consolidated figures reflect only external activity.
How does multi-currency cash flow work?
Report cash flow in different currencies:
- Navigate to Planning & Reports → Reports
- Select the currency view: Entity Crcy or Group Crcy
- Light displays amounts in your selected currency
For multinational companies:
- Each subsidiary's cash flow in its local currency
- Consolidated cash flow in group currency
- Light uses the local and group currency amounts recorded on each transaction at posting time
How do I export the cash flow statement?
Export cash flow for external distribution:
- Set your filters so the cash flow statement you want is displayed
- Click the download icon
- Light generates a CSV file
Frequently asked questions
What accounting method does Light use for the cash flow statement?
Light uses the indirect method, starting from net income and adjusting for changes in accounts receivable, accounts payable, inventories, and other working capital.
Does Light calculate free cash flow, coverage ratios, or other cash flow ratios automatically?
No. Light's cash flow statement shows a fixed set of lines (net income, operating/investing/financing cash flow, cash movement, and a check row) but does not calculate summary ratios like free cash flow, operating cash flow ratio, cash conversion rate, or debt service coverage. You'd need to calculate those yourself from the statement's line items.
Can I generate a consolidated cash flow statement across multiple entities?
Yes. Select consolidated entities when generating the report, and Light eliminates inter-company cash flows for documents set up for elimination, so internal movements aren't double-counted.
What currencies can the cash flow statement be shown in?
Choose Entity Crcy for each subsidiary's local currency, or Group Crcy for the consolidated group currency. Light uses the local and group currency amounts recorded on each transaction at posting time.
What file format does the cash flow statement export to?
CSV, via the download icon on the report.
How far back can I compare cash flow periods?
Up to 12 months back, or up to 3 years back, depending on the comparison period you select.
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