A cash-flow statement lists all money in, all money out, and the difference. The difference is a surplus when money in is larger and a deficit when it is smaller.
This lesson is part of the consumer mathematics and financial planning section. It uses the labels from distinguishing income, expenses, assets and liabilities.
How do I set up the statement?
Use the same layout every time. Totals go at the bottom of each block.
- List all income and add it.
- List fixed outflows and add them.
- List variable outflows and add them.
- Surplus or deficit = income − fixed − variable.
Worked example: two months for Aina
Aina is an invented student. In January her income is salary RM2 800 and tutoring RM400, which totals RM3 200.
| Outflow | January (RM) | February (RM) |
|---|---|---|
| Rent | 800 | 800 |
| Loan payment | 350 | 350 |
| Insurance | 150 | 150 |
| Fixed total | 1 300 | 1 300 |
| Food | 600 | 600 |
| Transport | 250 | 250 |
| Phone | 80 | 80 |
| Leisure | 220 | 220 |
| Motorcycle repair (one-off) | 0 | 1 100 |
| Variable total | 1 150 | 2 250 |
January: 3 200 − 1 300 − 1 150 = +RM750 surplus.
February income is also RM3 200. The surplus is 3 200 − 1 300 − 2 250 = −RM350 deficit.
Over both months, 750 − 350 = RM400 is left.
The mistake that counts the opening balance as income
Suppose Aina starts January with RM500 already in her wallet. Some students add it to income and write a surplus of RM1 250, which is wrong.
The RM500 was not earned in January, so the month’s surplus is still RM750. The balance at the end is 500 + 750 = RM1 250, which is a different figure with a different name.
Check yourself
Income is RM2 600. Fixed outflows are RM1 100 and variable outflows are RM900. A planned saving of RM300 is shown as an outflow. Find the surplus before saving and after saving.
Answer
Before saving: 2 600 − 1 100 − 900 = RM600.
After the planned saving of RM300: 600 − 300 = RM300.
The planned RM300 saving is already counted as an outflow, so the RM300 left is what remains after every outflow.
What to study next
Use a surplus to compare saving options in comparing saving plans using stated assumptions. Plot your own monthly figures with the graph evidence comparison lab.
If you want a teacher to go through your statements, see online one-to-one Mathematics tuition.