Statement of Cash Flows [SCFs]

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Financial Statement Review for Physicians

Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief ]

Did you know that the Statement of Cash Flows [SCFs] is only one of four financial statements? Yep; it is true. 


The four consolidated statements are: 

  1. Balance sheet,
  2. Net-income statement,
  3. Cash flow statement and,
  4. Statement of retained earnings. 

The SCF summarizes the affects of a medical practice or health entity on cash balances and/or liquidity from these three activities:

  • Operating activities: Including cash inflows (ARs, receipts, donations, accrued expenses, interest, and dividends) and outflows (inventory, prepaids, supplies, and loans) – this is where the majority of hospitals or medical practices generate most of their revenues from patient services and to a lesser degree from grants or other contributions, etc; 
  • Investing activities: Including the disposal or acquisition of non-current assets, such as equipment, loans or marketable securities; and,
  • Financial activities:  Generally including the cash inflow or outflow effects of transactions and other events, such as issuing capital stock or notes involving creditors, owners, or shareholders. 


Prior to 1988, the formal SCF was known as a Statement of Changes in Financial Position and projected estimated cash flows by month, quarter, and year, along with the anticipated timing of cash receipts and disbursements.  


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Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™




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