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.
Projecting Your Cash Flow
Projecting Your Cash Flow
Sales |
Profit |
Starting Cash |
|---|---|---|
| $ 190,237.62 | $ 13,316.62 | $ 10,000.00 |
Cash Flow Summary |
Cash Paid |
Ending Cash |
|---|---|---|
| 165,259.37 | 164,328.22 | 10,931.14 |
| Month | Profit | Cash Flow | Cash |
|---|---|---|---|
| Starting | 0 | 0 | 10000.00 |
| 1 | $ 1,050.00 | $ 750.00 | $ 10,750.00 |
| 2 | $ 1,060.50 | $ -9,662.50 | $ 1,087.50 |
| 3 | $ 1,071.10 | $ 940.88 | $ 2,028.38 |
| 4 | $ 1,081.82 | $ 950.28 | $ 2,978.66 |
| 5 | $ 1,092.63 | $ 959.79 | $ 3,938.45 |
| 6 | $ 1,103.56 | $ 969.38 | $ 4,907.83 |
| 7 | $ 1,114.60 | $ 979.07 | $ 5,886.90 |
| 8 | $ 1,125.74 | $ 988.88 | $ 6,875.78 |
| 9 | $ 1,137.00 | $ 998.76 | $ 7,874.54 |
| 10 | $ 1,148.37 | $ 1,008.74 | $ 8,883.28 |
| 11 | $ 1,159.85 | $ 1,018.84 | $ 9,902.12 |
| 12 | $ 1,171.45 | $ 1,029.03 | $ 10,931.15 |