# How to Do a Vertical Comparative Statement of Cash Flow

A company's cash flow statement shows its cash inflows and outflows for an accounting period. A comparative cash flow statement shows these amounts for two or more consecutive periods in side-by-side columns. A vertical analysis of a cash flow statement shows each cash inflow or outflow as a percentage of the total cash inflows to compare the percentages of a single period. You can create a comparative cash flow statement that shows a vertical analysis to compare the dollar amounts and percentages between periods and determine what portion each item contributes to a company's cash inflows.

## Step 1

Find the total cash inflow from operating activities listed at the bottom of the operating activities section of a company's most recent cash flow statement. In addition, find each cash inflow listed throughout the rest of the cash flow statement. A cash flow statement shows cash inflows without parentheses and cash outflows with parentheses. For example, assume a cash flow statement shows \$100,000 in total cash inflow from operating activities, \$5,000 from the sale of investments and \$15,000 from short-term borrowings.

## Step 2

Calculate the sum of each of the cash inflows to determine the total cash inflows during the accounting period. For example, calculate the sum of \$100,000 in total cash inflow from operating activities, \$5,000 from the sale of investments and \$15,000 from short-term borrowings. This equals \$120,000 in total cash inflows.

## Step 3

Divide each dollar amount listed on the cash flow statement by the dollar amount of total cash inflows, and multiply your result by 100 to calculate each dollar amount as a percentage of total cash inflows. For example, if net income is \$95,000, divide \$95,000 by \$120,000, which equals 0.79. Multiply this by 100, which equals 79 percent. Cash outflows will result in a negative percentage.

## Step 4

Write each percentage result, enclosing negative amounts in parentheses, next to each respective dollar amount in the column to the right of the existing dollar amounts on the cash flow statement. This column shows the portion each item contributed to total cash inflows. For example, write "79 percent" in the column to the right of the net income dollar amount of \$95,000.

## Step 5

Write each dollar amount from the prior period's cash flow statement in the column to the right of the percentages on the most recent cash flow statement. Write each amount on the same line as each respective amount listed on the most recent statement.

## Step 6

Calculate the total cash inflows of the dollar amounts from the prior period. Then divide each dollar amount from the prior period by your result to calculate each dollar amount as a percentage of the total cash inflows from that period.