We never bother to reconcile historical cash flow statement. Why not? Because you'll never know the adjustments the the company made. For instance, the change in A/R or A/P contains write-downs or other accruals that will not make the BS change exactly equal to the CF figures.

Got it. Actually, this is the scenario that I that am running into. I am building quarterly projection and take the quarters for annual projection. I have no problem if all four quarters were projected and either take the combine figures of all four quarters for income statement and cash flow sta... Got it. Actually, this is the scenario that I that am running into. I am building quarterly projection and take the quarters for annual projection. I have no problem if all four quarters were projected and either take the combine figures of all four quarters for income statement and cash flow statement or the Q4 figure for annual Balance sheet. However, the problem arises when the full year is mixed with historical and projection quarters. Ex. Now, assume a company's fiscal year is the same as the calendar year, I am doing a projection for 2019 by quarters. So I would have actual Q1 and Q2 from 10Q; however, I need to do the projection for Q3 and Q4. There is no problem for Income Statement which just add up all the quarters, no problem for Balance sheet which just take the projected Q4 figures. The problem arises in the cash flow statement. What I did was I combined all quarters (historical (Q1,Q2) & projected (Q3,Q4)) cash flow items; however, I could not get the ending cash balance that matches with projected Q4 cash balance in the balance sheet. Given my balance sheet is perfectly balanced; it's kind of weird that my cash flow statement's ending cash actually, in this case, for 2019E, is not the same as the cash on balance sheet which is taking from 2019Q4. Any advice would be helpful…. Read More

Hello, If you have your quarterly IS and BS projections, then the CF should be easy as long as you are using the indirect method of cash flow construction. Recall that the CF starts with NI, adds D&A and changes in working capital, the latter being derived from BS changes quarter to quarter. CapE... Hello,

If you have your quarterly IS and BS projections, then the CF should be easy as long as you are using the indirect method of cash flow construction. Recall that the CF starts with NI, adds D&A and changes in working capital, the latter being derived from BS changes quarter to quarter. CapEx for CFI is straightforward as is CFF items such as Dividends, share buybacks etc. Change in debt would derive naturally from quarterly debt schedule. As such, deriving quarterly cash flow statement is the same approach as an annual model. For the full year cash flow statement figures (that has a mix of historical actuals and your projections), you would simply add up the quarterly figures, not unsimilar to the IS approach. Read More

Got it. Many thanks. :)