Question

For the operating cash flow for an expansion do I separate the details on the expansion.

Example:

Cash flow statement

Revenue (existing)

Less Cogs (existing)

Less Expenses (existing)

= gross profit

Revenue (new)

Less Cogs (new)

Less Expenses (new)

= gross profit

Or, do I combine them both and use the below format

Revenue (existing)

Revenue (new)

Less Cogs (existing)

Less Cogs (new)

Less Expenses (existing)

Less Expenses (new)

= gross profit

Answer 1

When you want to show the effect of expansion the best way is to provide a comparative analysis i.e show the existing operating cash flow and show the cash flow from new business separately adding the two will automatically provide Total cash flow i.e. adding existing and new business. (Preferably you should add the total cash flow column as well)

This will provide all the required information to the user since it will show the cash flow generated from existing business plus the cash flow generated from new business thus showing separately that how much new business will generate the cash flow and whether it would be acceptable to invest in that business.

Just providing combined data of existing and new business would not provide all the information since if user want to know cash flow generated from new business or from existing business that information would not be provided in this case.

Hope the above information guides you