Subsection of: Creating an Effective Business Plan
Adapted from content excerpted from the American Express® OPEN Small Business Network
Use this glossary of terms to familiarize yourself with all of the potential components of a cash flow statement.
| Cash sales | Income from sales paid for by cash |
| Receivables | Income from the collection of receivables |
| Other income | Income from investments and the liquidation of assets |
| Total income | Cash plus cash sales plus receivables plus other income |
| Material (merchandise) | The raw material used to manufacture a product or the cash outlay for merchandise, or the supplies used in the performance of a service |
| Direct labor | The cost of labor required to manufacture a product or deliver a service |
| Overhead | Fixed and variable expenses required for the production of the product and operation of the service |
| Marketing/sales | Salaries, commissions, and other direct costs associated with the marketing and sales departments |
| R&D | Labor required to support Research and Development |
| General and Administrative | Labor required to support general adminisitrative functions |
| Taxes | Taxes, with the exception of payroll taxes |
| Capital | Capital needed to obtain equipment |
| Loan payments | Total of payments required to reduce long-term debts |
| Total expenses | The sum of material, direct labor, overhead expenses, marketing, sales, G&A, taxes, capital, and loan payments |
| Cash flow | Difference between total income and total expenses |
| Cumulative cash flow | Difference between current cash flow and cash flow from previous period |
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