# How do you calculate cumulative net flow?

Category:
personal finance
financial planning

Start by

**calculating Net**Cash**Flow**for each year:**Net**Cash**Flow**Year 1 = Cash Inflow Year 1 – Cash**Outflow**Year 1. Then**Cumulative**Cash**Flow**= (**Net**Cash**Flow**Year 1 +**Net**Cash**Flow**Year 2 +**Net**Cash**Flow**Year 3… etc.) Accumulate by year until**Cumulative**Cash**Flow**is a positive number: that year is the payback year.

Also, how do you calculate cumulative cash flow in Excel?

**Follow these steps to calculate the payback in Excel:**

- Enter all the investments required.
- Enter all the cash flows.
- Calculate the Accumulated Cash Flow for each period.
- For each period, calculate the fraction to reach the break even point.
- Count the number of years with negative accumulated cash flows.

**net present value**of a project as of some year prior to T. We will call this the "

**Cumulative NPV**" as of year X. Mathematically, this is defined as:

**Cumulative NPV**=X∑t=0(Bt−Ct)(1+r)t.

Similarly, how do you calculate the payback period?

**There are two ways to calculate the payback period, which are:**

- Averaging method. Divide the annualized expected cash inflows into the expected initial expenditure for the asset.
- Subtraction method. Subtract each individual annual cash inflow from the initial cash outflow, until the payback period has been achieved.

Your company's **cash flow statement** reflects **cash flows** into and out of the company from sales, investing and financing activities. You add the net **cash** from this period to the prior period's **cash** to determine your company's **cumulative cash flow**.