Projecting Your Cash Flow

Financial Information

The amount of cash you have at the start of the cash flow analysis.

The profit margin you make on your sales.

The percentage of your selling price that goes to Cost of Goods Sold (COGS) for the products that you sell. Service businesses will generally have a COGS of zero. For retailers, this will reflect your product purchase costs and for manufacturers it will also include the cost of manufacturing.

Sales Information

First month's sales

Your first month of sales. This will serve as the baseline sales volume to use for your cash flow projection.

Monthly sales growth

The rate at which your sales grow on a month-to-month basis. To calculate monthly sales growth off of an annual growth rate number, simply divide the annual rate by 12.

Sales on credit

The percentage of your monthly sales that are made on credit your business directly extends to its customers. This does not include credit card transactions.

Credit terms (days)

The number of days you extend credit for. Typical terms are Net 30 days, Net 60 days and so on.

Starting receivables

The amount of money currently owed to you under the credit terms used for your business.

Cost Information

Initial inventory balance

The dollar value of the inventory you have on hand at the start of the cash flow analysis.

Months of inventory

The number of months of inventory you have on hand to meet your sales needs.

Starting payables

The amount of money you currently owe to vendors, suppliers, contractors and others that have extended credit to your business.

Payables terms (days)

The number of days your creditors have typically extended you credit for. Typical terms are Net 30 days, Net 60 days and sometimes longer periods of time.

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Business Results
Sales	Profit	Starting Cash

Cash Flow Summary
Cash Flow Summary	Cash Paid	Ending Cash

Even if a business is profitable, it might fail because it is not generating enough cash flow. Money that is tied up in inventory and receivables is not available to help the business pay its bills. You can vary inventory levels, payment terms, and other variables to find the formula that is right for your business to make sure you are generating a positive cash flow.

This calculator is intended for informational purposes only and is considered an estimate. The accuracy of this calculator is not guaranteed by General Electric Credit Union (GECU). The calculator and its results do not constitute the advice of, or reflect actual products, services, rates, and/or terms available. Nothing contained in the calculator shall constitute an offer or solicitation of a product or service by GECU. This calculator is not intended to offer any tax, legal, financial, or investment advice. Please consult with qualified advisors to discuss your specific needs.

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