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{"id":9763,"date":"2025-07-16T14:39:00","date_gmt":"2025-07-16T07:39:00","guid":{"rendered":"https:\/\/fdi.co.th\/?p=9763"},"modified":"2025-09-30T16:12:02","modified_gmt":"2025-09-30T09:12:02","slug":"%e0%b8%95%e0%b9%89%e0%b8%ad%e0%b8%87%e0%b8%a3%e0%b8%b9%e0%b9%89-%e0%b8%a7%e0%b8%b4%e0%b8%98%e0%b8%b5%e0%b8%94%e0%b8%b9%e0%b8%87%e0%b8%9a%e0%b8%81%e0%b8%b2%e0%b8%a3%e0%b9%80%e0%b8%87%e0%b8%b4","status":"publish","type":"post","link":"https:\/\/fdi.co.th\/en\/%e0%b8%9a%e0%b8%97%e0%b8%84%e0%b8%a7%e0%b8%b2%e0%b8%a1-acc\/%e0%b8%95%e0%b9%89%e0%b8%ad%e0%b8%87%e0%b8%a3%e0%b8%b9%e0%b9%89-%e0%b8%a7%e0%b8%b4%e0%b8%98%e0%b8%b5%e0%b8%94%e0%b8%b9%e0%b8%87%e0%b8%9a%e0%b8%81%e0%b8%b2%e0%b8%a3%e0%b9%80%e0%b8%87%e0%b8%b4\/","title":{"rendered":"Must-know! How to read financial statements and cash flow statements to ensure your business\u2019s liquidity."},"content":{"rendered":"
A key factor in successfully managing a business in today\u2019s rapidly changing economy isn\u2019t just about increasing sales \u2014 it\u2019s about effectively managing\u201cfinancial liquidity.\u201d<\/span>One of the most essential tools that every business owner and executive should understand is the \u201cfinancial statement,\u201d especially the \u201ccash flow statement,\u201d which is often overlooked. This article will help you understand the movement of cash flow \u2014 where it comes from, how it moves, and how to read it using common analysis methods.\u00a0<\/span><\/p> A Cash Flow Statement (Statement of Cash Flow) is a financial report that shows the inflows and outflows of cash and cash equivalents within a business. It presents the movement of cash from various business activities over a specific period of time.\u00a0<\/span><\/p> Because the cash flow statement answers the critical question: \u201cDoes the business have enough cash on hand?\u201d In reality, even a profitable business can go bankrupt if it lacks sufficient cash to pay debts, salaries, and other obligations. Understanding the cash flow statement also reveals the company\u2019s financial structure \u2014 whether it is taking on debt, repaying loans, or issuing dividends.\u00a0<\/span><\/p> For example, a company might have sales of 10 million baht and a profit of 1 million baht, but if 8 million baht of that revenue remains unpaid by customers, the company could face a cash flow shortage if payments are not collected on time. This means that, despite appearing to be \u201cprofitable,\u201d the business could still suffer from a lack of financial liquidity.<\/span><\/p> \u00a0<\/p> Krungthai Bank <\/b><\/a><\/span>provides<\/span>an interesting explanation that the cash flow statement is divided into three main activities, reflecting the company\u2019s liquidity, sources of funds, and cash expenditures, as follows:\u00a0<\/span><\/p> This refers to the cash flow generated from business operations, including cash inflows and outflows arising from the company\u2019s core activities, such as revenue from sales of goods or services, cost of sales, depreciation, rent, wages, and taxes.<\/span><\/p> This refers to the cash flow generated from various investment activities, including the acquisition and disposal of long-term assets such as machinery, equipment, land, buildings, or investments in securities or other businesses.<\/span><\/p> This refers to the cash flow resulting from obtaining external financing or using internal funds, such as borrowing from financial institutions, repurchasing shares, or paying dividends.<\/span><\/p> The cash flow statement equation is a formula that shows the relationship between cash and cash equivalents from the beginning of the period to the end of the period. The cash flow statement equation can be written as follows:<\/span><\/p> Beginning Cash = Ending Cash + Cash Flow from Operating Activities (CFO) + Cash Flow from Investing Activities (CFI) + Cash Flow from Financing Activities (CFF)<\/span><\/i><\/p> When opening the cash flow statement, you should start by looking at the overall \"net cash\" increase or decrease from the three activities mentioned above, observing that...<\/span><\/p> In the case that it is found that...<\/span><\/p> \u0e16\u0e49\u0e32If all three activities above are in alignment, it is considered a healthy<\/em> <\/strong>cash flow structure. This reflects that the business can generate income on its own, operates prudently, is capable of generating profit, and effectively uses funds to develop and expand its operations.\u00a0<\/span><\/p> \u00a0<\/p> A good cash flow statement depends on the nature of the business and the purpose of the statement\u2019s readers. However, a good cash flow statement should have the following characteristics:\u00a0<\/span><\/p> 1. Has positive net cash flow, reflecting the business\u2019s ability from operations and investments, showing profitability and the ability to repay debt.\u00a0<\/span><\/p> 2. Has positive cash flow from operating activities, indicating that the business is capable of generating revenue and cash flow from its core operations, which positively impacts the company\u2019s liquidity. <\/span><\/p> 3. Cash flow from investing activities aligns with the company\u2019s investment plans.<\/p> 4. Cash flow from financing activities aligns with the company\u2019s financial plans.\u00a0<\/span><\/p> \u00a0<\/p> \u00a0<\/p> We are committed to supporting your business toward a sustainable future with long-term accounting and tax planning consultancy services. Our team of experts possesses extensive experience and deep knowledge to help you achieve your goals for a sustainable business.\u00a0 <\/span>allowing your company to operate efficiently while minimizing tax-related concerns. In addition, we offer advice and consultation for long-term business planning to ensure your business grows steadily and securely.<\/span><\/p>What is a Cash Flow Statement ?<\/b><\/h1>
Why is it important to understand the \u201cCash Flow Statement\u201d?<\/b><\/h2>
What are the 3 activities shown in a cash flow statement?\u00a0<\/b><\/h2>
1. Cash Flow from Operating Activities (CFO)<\/b><\/h3>
2. Cash Flow from Investing Activities (CFI)<\/b><\/h3>
3. Cash Flow from Financing Activities (CFF)<\/b><\/h3>
Summary of the Cash Flow Statement Equation<\/b><\/h2>
<\/p>\u00a0<\/h2>
How to read a cash flow statement in an easy-to-understand way ?\u00a0<\/b><\/h2>
<\/span>Does the business rely on borrowing, and is it at a safe level?\u00a0<\/span><\/li><\/ul>What should a good cash flow statement look like?\u00a0<\/b><\/h2>
How does the cash flow statement assist in business decision-making?<\/b><\/h2>
<\/span> helping business owners know whether there is enough cash to cover monthly expenses.<\/span><\/li>
<\/span> if the business lacks sufficient cash, it may need to seek additional loans or improve cost management.<\/span><\/li>
<\/span> if cash inflows are slow, consider offering discounts to customers who pay early or adjust credit terms.<\/span><\/li>
<\/span> if profits are high but cash is insufficient, dividend payments may need to be postponed.<\/span><\/li><\/ol>Expert advice and tips for entrepreneurs:<\/b><\/h2>
\u00a0FDI: Accounting and Tax Planning Consultants for Corporations.<\/b><\/h2>
Contact Us\u00a0<\/b><\/h3>
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