4. CASH FLOW STATEMENT

CASH FLOW STATEMENT

This is one of the most important information tools for your business. It shows how much money you need to meet obligations, when it is to be needed and from where it will come.

It shows money coming into the business and money going out.

The result is a cash balance at the end of each period.

The Cash Flow statement rests on calculations done elsewhere.

The cash flow statement begins with cash on hand and the revenue sources. The next item lists expenses including those incurred in the manufacture or purchase of the product. Any capital requirements paid in cash are then listed. The last figure is a net cash flow and the balance of cash to be carried over to the next period.

In the business plan the cash flow is normally done on a projected monthly basis for the first year.

CASH FLOW FOR THE BUSINESS FROM (DATE) TO (DATE)
Month 1 Month 2 Month 3
Balance brought forward yyyyyy ZZZZZZ AAAAAA

Cash inputs (eg. Loan from Branson) XXXXXX

PLUS Cash sales XXXXXX XXXXXX XXXXXX
PLUS Receivables (accounts paid to you) XXXXXX XXXXXX XXXXXX
PLUS Other income XXXXXX XXXXXX XXXXXX

TOTAL available cash XXXXXX XXXXXX XXXXXX

LESS

Material/Merchandise XXXXXX XXXXXX XXXXXX
Production labour XXXXXX XXXXXX XXXXXX
Overhead XXXXXX XXXXXX XXXXXX
Marketing/sales expenses XXXXXX XXXXXX XXXXXX
Admin costs XXXXXX XXXXXX XXXXXX
Taxes XXXXXX XXXXXX XXXXXX
Capital expenses XXXXXX XXXXXX XXXXXX
Loan repayments XXXXXX XXXXXX XXXXXX

Total cash out XXXXXX XXXXXX XXXXXX

= CASH FLOW
(Difference between total income ZZZZZZ AAAAAA BBBBBB
and total expenses)

The cash flow is either added or subtracted from the beginning balance and this amount is then carried over to the beginning of the next period as the brought forward cash balance available.

QED

Regards - Charl Heydenrych proplib@tiscali.co.za