347 647 9001+1 714 797 8196Request a Call
Call Me

Modeling the Cash Flow Statement for Facebook

February 14, 2012
, , ,

Did you know that Apple has USD 94 Bn Cash with itself? That is more than the GDP of 66% of the countries of the world. Yes you heard it right! I am not speaking about 66% companies - I am speaking about 66% of the COUNTRIES!

That was slightly off track!

Today we start building the most important financial statement - Cash flow statement!

What is Cash flow Statement?

I always say that Cash Flow Statement is the ONLY true statement in all the financial statements. It speaks about the real cash. The rest (Profit and Loss Statement of Facebook and Balance Sheet of Facebook) are accounting statements and I think they are just views! Cash flow statement speaks about how much cash flowed in and how much flowed out. REAL CASH!

How to Create Cash Flow Statement

There are 2 methods of creating the cash flow statement

  • Direct
  • Indirect

Direct is possible only if you have all the accounting entries with you (how much the company purchased, what out of it was cash, what was on credit etc.). Unfortunately we don't have that luxury. We just have the historical broad numbers with us! So we would be creating the Cash Flow Statement of Facebook through the indirect method

Cash Flow Template

My experience of modeling says that - Creating the Cash Flow Statement is a simple exercise for those who know but is tricky for those who don't (This statement is like the golden rule of Investing (BUY LOW SELL HIGH!)

I am giving you the template of an empty cash flow statement. Why don't you try to create it on your own.

We would be releasing the tutorials on the process to create the cash flow statement and I would keep guiding you on the process. So stay tuned!


About the Author

Pankaj Baheti is a CFA Level III Candidate currently working with Pristine. Prior to Pristine, he was working with Achi Group. He has done his Post Graduate Diploma in Management and loves trekking in the hills of Arunachal.


Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to and we will rectify it.

Popular Blogs: Whatsapp Revenue Model | CFA vs CPA | CMA vs CPA | ACCA vs CPA | CFA vs FRM

Post ID = 12216