Cash Flow Statement

Part 3: Building a Cash Flow Statement

The Cash Flow Statement (CFS) ties everything together.

It connects your P&L and Balance Sheet by translating profits, losses, and balance sheet movements into cash activity—giving you a full view of your company’s liquidity and runway.

This is the final component of your 3-statement model, and it’s the best way to validate that your entire forecast is structurally sound. If your CFS links correctly and your balance sheet zeros out, your model is good to go.

What Is the Cash Flow Statement Used For?

The CFS shows you how money moves through your business. It answers:

• Are we burning or generating cash?

• What’s driving changes in our cash position?

• How long can we operate before needing to raise or reinvest?

It’s one of the most scrutinized financial reports in forecasting and fundraising, and it proves whether your accounting logic checks out.

Linking the Statements

A quick recap of how the three statements connect:

• The P&L produces Net Income

• The Balance Sheet tracks your financial position over time

• The Cash Flow Statement reconciles the two by translating profit and balance movements into actual cash movement

If done right, cash is the final dependent variable in your model. Every assumption rolls up to it.

Setting Up a Cash Flow Statement in Pluvo

Step 1: Create a New Model

1. In the sidebar, click + New Model

2. Name it something like Cash Flow Statement

3. (Optional) Place it in the same folder as your P&L and Balance Sheet models

Pay close attention to time scales, denoted below in square brackets e.g: [last month], as they play an important role in biulding the CFS.

Step 2: Structure the Statement

Break your model into three main folders or sections:

Cash Flows from Operating Activities

Start with:

• Net Income — reference directly from your P&L In Pluvo, can easily reference variables from another model by

Then adjust for non-cash items:

• + Depreciation

• + Amortization (if applicable)

Then calculate working capital movements:

• ChangeInAR = AR - AR[Last month] (cash out)

• ChangeInAP = AP - AP[Last month] (cash in)

• ChangeInInventory = Inventory - Inventory[Last month] (cash out)

[📸 Screenshot: Sample operating activities section]

Cash Flows from Investing Activities

• Subtract Capex (Capital Expenditures): Capex = FixedAssets - FixedAssets[Last month] + Depreciation

• Include any other long-term investments or asset disposals as needed

Cash Flows from Financing Activities

Include changes from your capital structure:

• + NewDebt

• - Repayments

• + CapitalRaised

• - DividendsPaid

[📸 Screenshot: Investing and Financing activities sections]

Step 3: Calculate Net Cash Flow

Add the totals from each section:

NetCashFlow = OperatingCash + InvestingCash + FinancingCash

This is your change in cash for the period.

Step 4: Link to the Balance Sheet

Head to your Balance Sheet model and set the Cash forecast as:

Cash = Cash[Last month] + NetCashFlow

This makes your Cash balance entirely driven by the rest of your model.

[📸 Screenshot: Linking cash flow to balance sheet]

Example: Double-Entry Logic

Pluvo doesn't enforce accounting debits and credits—but the logic still applies.

If you spend $50,000 on new servers:

• FixedAssets = FixedAssets[Last month] + 50,000

• Cash = Cash[Last month] - 50,000

Total assets remain unchanged. Your model is balanced.

Another example:

• NetIncome increases → RetainedEarnings increases

• Cash increases as a result of positive NetCashFlow

Every movement affects at least two accounts. If you don’t model both sides, your Balance Sheet won’t balance.

Final Check: Make Sure It Balances

In your Balance Sheet, we can revisit the check row we set up in the previous article.

BalanceCheck = TotalAssets - (TotalLiabilities + TotalEquity)

This should always equal 0. If not, something is missing from your CFS.

Add a warning flag or visual cue to alert if this ever shows a non-zero number. It’s the easiest way to catch logic gaps in your forecast.

Once your CFS is complete and linked, your model becomes a live, fully-connected system. All assumptions—from revenue drivers to headcount to debt repayments—flow into cash. This is the gold standard for strategic financial modeling.