How to Find Cash Received From Customers Using an Income Statement

How to Find Cash Received From Customers Using an Income Statement
Cash received from customers includes cash sales and cash collections on invoices.

Step 1

Find the amount of a company’s sales on its most recent income statement. The single dollar amount listed on the income statement includes a company’s cash sales and credit sales for which it invoices a customer. For example, assume a company reports $100,000 in sales on its income statement.

Step 2

Find the the company’s accounts receivable balance on its most recent balance sheet and the previous period’s balance sheet. An accounts receivable balance is the amount a company’s customers owe it for purchases made on credit. In this example, assume the company’s most recent balance sheet shows $30,000 in accounts receivable and that its previous period’s balance sheet shows $40,000 in accounts receivable.

Step 3

Subtract the previous period’s accounts receivable balance from the most recent period’s accounts receivable balance to calculate the change in the balance. A positive result represents an increase in accounts receivable; a negative result represents a decrease. In this example, subtract $40,000 in the previous period from $30,000 in the most recent period to get -$10,000, which represents a $10,000 decrease in accounts receivable.

Step 4

Add a decrease in accounts receivable to the amount of sales from the income statement to calculate cash received from customers. Alternatively, subtract an increase in accounts receivable from sales to calculate cash received from customers. This adjusts sales on the income statement to a cash basis. In this example, add the $10,000 decrease in accounts receivable to $100,000 in sales from the income statement to get $110,000 in cash received from customers.