Cash Flow Projection

1、Noteson PreparationNote:You may want to print this information to use as reference later. To delete theseinstructions, click the border of this text box and then press the DELETE key.Note:In the Twelve Month Cash Flow sheet, enter amounts only in the white cells.Cells with a light blue colour are ca

2、lculated automatically.Refer back to your Budget (Profit & Loss Projection). Line-by-line ask yourself whenyou should expect cash to come and go. You have already done a sales projection,now you must predict when you will actually collect from customers. On the expenseside, you have previously p

3、rojected expenses; now predict when you will actuallyhave to write the check to pay those bills. Most items will be the same as on theProfit & Loss Projection. Rent and utility bills, for instance, are usually paid in themonth they are incurred. Other items will differ from the Profit & Loss

4、 view.Insurance and some types of taxes, for example, may actually be payable quarterlyor semiannually, even though you recognize them as monthly expenses. Just try tomake the Cash Flow as realistic as you can line by line. The payoff for you will be anability to manage and forecast working capital

5、needs. Change the category labels inthe left column as needed to fit your accounting system.Note that lines for Loan principal payment through Owners Withdrawal are foritems that always are different on the Cash Flow than on the Profit & Loss. LoanPrincipal Payment, Capital Purchases, and Owners

6、 Draw simply do not, by the rulesof accounting, show up on the Profit & Loss Projection. They do, however, definitelytake cash out of the business, and so need to be included in your Cash plan. On theother hand, you will not find Depreciation on the Cash Flow because you never writea check for D

7、epreciation. Cash from Loans Received and Owners Injections go inthe Loan/ other cash inj.row. The Pre-Startup column is for cash outlays prior tothe time covered by the Cash Flow. It is intended primarily for new business startupsor major expansion projects where a great deal of cash must go out be

8、foreoperations commence.The bottom section, ESSENTIAL OPERATING DATA, is not actually part of theCash model, but it allows you to track items which have a heavy impact on cash. TheCash Flow Projection is the best way to forecast working capital needs. Begin withthe amount of Cash on Hand you expect

9、to have. Project all the Receipts and PaidOuts for the year. If CASH POSITION gets dangerously low or negative, you willneed to pump in more cash to keep the operation afloat. Many profitable businesseshave gone under because they could not pay the bills while waiting for money to flowin. Your credi

10、tors do not care about profit; they want to be paid with cash. Cash is thefinancial lifeblood of your business.This is a document from the internet information service bedin.noCash Flow Statement - a free document template from Bedin.noThe purpose of the service is to make it easier to start and run

11、 a business in Norway.Note: This document is of a general nature. The contents must be adapted to theThis is a document from the internet information service bedin.noCash Flow Statement - a free document template from Bedin.noThe purpose of the service is to make it easier to start and run a busines

12、s in Norway.Note: This document is of a general nature. The contents must be adapted to theGUIDELINESGENERALDefinition: A cash flow projection is a forecast of cash funds a business anticipates receiving and paying outthroughout the course of a given time span, and the anticipated cash position at s

13、pecific times during the periodbeing projected. For the purpose of this projection, cash funds are defined as cash, cheques, or money order,paid out or received.Objective: The purpose of preparing a cash flow projection is to determine shortages or excesses in cash fromthat necessary to operate the

14、business. If cash shortages are revealed in the project, financial plans must bealtered to provide more cash until a proper cash flow balance is obtained. For example, more owner cash, loans,increased selling prices of products, or less credit sales to customers will provide more cash to the busines

15、s. Waysto reduce the amount of cash paid out includes having less inventory, reducing purchases of equipment or otherfixed assets, or eliminating some operating expenses. If excesses of cash are revealed, it might indicatedexcessive borrowing or idle money that could be used more effectively. The ob

16、jective is to finally develop a planwhich, if followed, will provide a well-managed flow of cash.The Spreadsheet: The cash flow projection worksheet in this file provides a systematic method of recordingestimates of cash receipts and expenditures, which can be compared with actual receipts and expen

17、ditures as theybecome known. The entries listed in the spreadsheet will not necessarily apply to every business, and some entriesmay not be included which would be pertinent to specific businesses. It is suggested, therefore, that you adapt thespreadsheet to your business, with appropriate changes i

18、n the entries as required. Before the cash flow projectioncan be completed and a pricing structure established, it is necessary to know or to estimate various elements of thebusiness, for example:- What are the direct costs of the product or services per unit?- What are the monthly or yearly costs o

19、f the operation?- What is the sales price per unit of the product or service? Determine that the pricing structure provides thisbusiness with reasonable breakeven goals including a reasonable net profit when conservative sales goals aremet.- What are the available sources of cash, other than income

20、from sales; for example, loans, equity capital, rent, orother sources?Procedure: Most of the entries for the cash flow spreadsheet are self-explanatory; however, the followingsuggestions are offered to simplify the procedure:a) If this is a new business, or an existing business undergoing significan

21、t changes or alterations, the cash flowpart of the column marked Pre-start-up Position should be completed. Fill in appropriate blanks only. Costsinvolved here are, for example, rent, telephone, and utilities deposits before the business is actually open. Otheritems might be equipment purchases, alt

22、erations, the owners cash injection, and cash from loans received beforeactual operations begin.b) Next fill in the pre-start-up position of the essential operating data non-cash flow information, where applicable.c) Complete the spreadsheet t considering the proposed contents for each entry, given

23、in the notes provided in theworksheet.Analysisa) The cash position at the end of each month should be adequate to meet the cash requirements for the followingmonth. If too little cash, then additional cash will have to be injected or cash paid out must be reduced. If there istoo much cash on hand, t

24、his money is not working for your business.b) The cash flow projection, the profit and loss projection, the breakeven analysis, and good cost controlinformation are tools which, if used properly, will be useful in making decisions that can increase profits to insuresuccess.c) The projection becomes

25、more useful when the estimated information can be compared with actual informationas it develops. It is important to follow through and complete the actual columns as the information becomesavailable. Utilise the cash flow projection to assist in setting new goals and planning operations for more pr

26、ofit. Asuggested way to do this is to enter actual cash receipt amounts and cash paid out amounts in the actualspreadsheet included in this file.These guidelines are adapted from a similar cash flow projection spreadsheet published by the site .ukAnalysisa) The cash position at the e

27、nd of each month should be adequate to meet the cash requirements for the followingmonth. If too little cash, then additional cash will have to be injected or cash paid out must be reduced. If there istoo much cash on hand, this money is not working for your business.b) The cash flow projection, the

28、 profit and loss projection, the breakeven analysis, and good cost controlinformation are tools which, if used properly, will be useful in making decisions that can increase profits to insuresuccess.c) The projection becomes more useful when the estimated information can be compared with actual info

29、rmationas it develops. It is important to follow through and complete the actual columns as the information becomesavailable. Utilise the cash flow projection to assist in setting new goals and planning operations for more profit. Asuggested way to do this is to enter actual cash receipt amounts and

30、 cash paid out amounts in the actualspreadsheet included in this file.Cash Flow (12 months)Enter Company Name HereFiscal Year Begins:jan 07Pre-Startupjan 07feb 07mar 07apr 07mai 07jun 07jul 07aug 07sep 07okt 07nov 07des 07Total (endof year)1.Cash on Hand (beginning ofmonth)00000000000002.INCOMEa)Cash Salesb)Other income (credit accounts)b)Loan / other cash injections3.TOTAL CASH RECEIPTS000000000000004.Total Cash Available (beforecash out)000000000000005.CASH PAID OUTa)Purchases