REIT Operating Model part 11, Cash Flow Statement. Before we can finish the balance sheet and calculate our debt and equity we need to complete the cash flow statement. Typically, the cash flow statement is what is used in a model, in a financial forecast to balance. And this is not untrue, it's just that we need information from the cash flow statement in order to be able to calculate our debt and equity. So if we move to the operating model we see that we have a cash flow statement which has been partially completed in the sense that all of the labels are here. Now, cash flow statements can be very complicated. One of the challenges, making sure that the labels are correct so that we can capture all of the changes in the balance sheet accounts. We're starting with a label set here because we're assuming that most people have already done a cash flow statement. I'm starting with a full label set here for simplicity and for ease of instruction. However, if you'd like to delete the labels and try to go through it on your own, that would be a very good exercise. So a cash cashflow from operations. We're gonna start with our year one net income. And remember, in a cashflow statement we never want to calculate the historical years of a cashflow statement. We only wanna do the forecast years. We are then going to add back our depreciation as a non-cash item, so I'm scrolling up to depreciation. We also want to reverse any gains and losses on the disposal of assets because those are also non-cash, so I'm going to do equals and then negative to reverse the income statement impact. And here we have a gain of 25 which I'm backing out for non-con controlling interest. The income attributable to NCIS has reduced our net income so this is also a non-cash impact. So what I want to do here is I want to add it back. Similarly, my equity income from co-investments has artificially inflated my income in a non-cash way so I want to go ahead and subtract that out. Lastly, I need to calculate the total changes in operating assets and liabilities. These are the accounts that impact the operations on a day-to-day basis, such as collecting on accounts receivable, paying suppliers, et cetera. What I've done here is I've created on the calculations page at the very bottom, and operating working capital account. All this simply does is pull in the data from the balance sheet for my working assets as well as my working liabilities, and then nets the liabilities from the assets. What I need to do here is take the change from the historical year zero to the current year one, and because I subtracted my liabilities from my assets I have effectively a net asset balance in this calculation and therefore I want to treat it as though it's an asset account, even though I have a negative balance here, I'm treating it as though I have an asset account and I'm subtracting last year, minus this year, and I'm showing an increase or a cash flow of 21,126. My total those up and I get my net operating cash flow. Now, the investing section, similar to the calculation for the real estate assets is gonna be complicated. All the data's gonna come from that section but we're actually, to recall, we're doing the inverse because in that section, in our calculations, those activities were for the most part increasing the value of our real estate assets, or in the case of dispositions and depreciation, decreasing the value. But here we're looking at the cash flow so it's actually gonna be the inverse for acquisitions. I'm gonna take the inverse of my acquisitions to real estate assets, and then I can just copy this down because the row structure is the same. Where I want to be careful is with disposals. If I copy this down, I get the correct cash flow and then it's positive because I'm disposing therefore, cash is coming in. However, this 100 represented the book value of the disposal, I wanna make sure, because I've backed out the gain on this disposal, that I actually go ahead and take the the entire 125 of the asset disposition. I sum those up (keyboard clacking) and now I can move on to my financing section. Dividends paid to common, this is also a cash outflow. I can go to my calculations, to the dividend section and I take the opposite of the total dividends paid. Similarly, dividends paid to the NCI are also actual cash flow because we did have to pay dividends to the non-con controlling stakes and that's going to be the opposite of 25,000. Now, I can sum these up, but I wanna make sure I include even the sales that I have not calculated yet because if I don't include them now there's a likelihood that I could forget later. Even though the cash flow statement is not complete I'm gonna put the architecture in for it. So I take my ending cash of the previous year which is going to be equal to my ending cash and my balance sheet, and then my net cash flow is then the sum of my operating investing and financing cash flows. My ending cash will be the beginning cash or ending of the previous year, plus my net cash.