How do you draw a cash flow diagram in Excel?

A cash flow diagram: what is it?

An Excel cash flow diagram is a visual aid that shows information about the amount of money coming in and going out over a given period. It comprises flows and nodes that stand in for the inflow and outflow of currency.

• The total amount of money and its equivalent coming into and going out of your organisation is known as cash flow.
• The money you have been given is an indication of inflows. Conversely, the costs signify withdrawals. Your brand's capacity to produce positive cash flows will dictate how much value you can add for shareholders.
• Cash flow models allow you to collect enormous amounts of data. Therefore, if you don't visualise this data for clarity, you risk experiencing analysis paralysis.

Introduction

Making a cash flow diagram for sales is sometimes necessary when dealing with Microsoft Excel's sales-related spreadsheets to comprehend the sales conditions necessary for a company to profit. Excel makes it simple to create a cash flow diagram. It also saves time to do this task. In this tutorial, we'll discover five efficient methods that will teach you how to create a cash flow diagram using Excel with the right pictures.

These are used by engineers and management accountants to show, within the framework of engineering and business economics, the financial transactions that will take place during a project. Transactions may include initial investments, maintenance costs, projected project earnings/savings, and the salvage and resale worth of the equipment. Next, these diagrams and the associated modelling are used to calculate the break-even point. Additionally, they are employed in a broader and more in-depth evaluation of operations and profitability.

Step-by-Step Procedure on How to Create a Cash Flow Diagram Using Excel

Suppose we have a dataset detailing the ABC group's income and expense statements. Columns C and D, respectively, provide an explanation of the income and expense as well as the running balance. We will first create a dataset using parameters. Next, we will create an Excel cash flow diagram to comprehend the ABC group's running balance. The dataset for the work at hand is summarised here.

Step 1: Create a Dataset with Appropriate Settings

This section will create the dataset for an Excel cash flow chart. The income and cost statement for the ABC group will be included in a dataset we build. Our dataset thus becomes.

Step 2: Use Charts Group

We will now create a cash flow diagram from our dataset using the Charts group option within the Insert ribbon. This work is easy. It also saves time to do this task. Now, let us make an Excel cash flow diagram by following the below steps!

• Choose the data range for the cash flow graphic first. We choose C3 through D14 from our dataset for ease of use in our work.
  
• Once the data range has been chosen, navigate to Insert → Charts → Recommended Charts using the Insert ribbon.
  

Step 3: Using the Waterfall Chart Option

We'll create a cash flow diagram using the waterfall option in this step. Let's learn by following the guidelines below!

• This will cause the Insert Chart dialogue box to appear before you. First, choose the All Charts option through the Insert Chart dialogue box. Second, choose the Waterfall Finally, click the OK button.
  
• Once you select OK, the dataset shown in the screenshot below can be used to create a cash flow diagram.
  

Step 4: Give the Cash Flow Diagram a Title

We will give the cash flow diagram a title once it has been created. Let's learn by following the guidelines below!

• It is now time to provide the chart's title. It is titled "Cash Flow Diagram."
  

Step 5: Formatting the Cash Flow Diagram

We will now present the cash flow diagram's format. To accomplish that, follow the guidelines provided below.

• Press anywhere on the chart to begin formatting the cash flow diagram. Like the screenshot that's below:
  

Calculator for Cash Flow Diagrams

The cash flow diagram can be calculated using the workbook from today. Calculator is the name of a sheet.

• Look through that sheet. There are fields for trades, stock, consultative, personnel, earnings, utility, repair, cell phones, automobiles, and accessories. Add your values here. The total income created by the cash flows shown in the screenshot below will be computed.

I've provided an example with multiple expense and revenue values. You can enter as many wins and losses as you want.