How to calculate the cash balance

You can see that the total flow of cash into the business (income) for January was £15,500, and that the total outflow from the business (expenditure) was £15,000. You can find the cash balance by subtracting the expenditure from the income, shown as a net surplus (profit) or a net deficit (loss).

Income - Expenditure = Balance

£15,500 - £15,000 = £500 (a surplus)

Compare this with February's results:

Income - Expenditure = Balance

£16,100 - £17,200 = -£1,100 (a deficit)