Quick and Dirty Cash Flow - Free Version
Quick and Dirty Cash Flow Projections
There are two reasons to create a statement of cash flow:
- A prospective lender or investor has asked for one.
- For planning your upcoming year; whether it’s ensuring you have enough cash to carry you through a slow period, or figuring out when you can afford to make a big purchase.
If you need cash flow projections for a loan application or investor presentation, we recommend that you use the standard format. For internal planning purposes, the “quick and dirty” method is just fine. For both methods, we recommend that you project cash flow for each month. While in the entirety of a year, you can end with a positive cash balance, there may be slow months for your business that could send you into a negative cash situation. By looking at your projections month by month, you can make sure you don’t run into trouble.
For the quick and dirty method, write down your beginning cash balance (the total of what you have in your savings and checking accounts). Then, for each month, list out your projected revenues (cash inflows) and cash outlays for expenses, debt repayment or capital purchases. At the end of each month, calculate the net cash flow. Add (or subtract) that number from your previous month’s cash balance.
Now what?
For each month, make sure you balance is never negative. If it is, you need to figure out a way to increase cash inflow (by increase revenue or borrowing money) or decreasing cash outflows (by decreasing expenses or delaying big purchases).
Need more help? We offer a half-hour phone consultation with screen-share to coach you through the use of this template for $90.
Recipe Card: Caramelized Cherry Tomato Sauce
Download the two-sided, full-color recipe card with a detailed description of cherry tomatoes, expert storage tips and an illustrated recipe for Caramelized Cherry Tomato Sauce from The Farmers Market Cookbook.
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Recipe Card: Okra Fritters
Download the two-sided, full-color recipe card with a detailed description of okra, expert storage tips and an illustrated recipe for Okra Fritters from The Farmers Market Cookbook.
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Debt Service Calculator
Whether you are launching or growing a business, you will likely need outside funding. Can you afford the loans? How do the loans affect your profitability and cash flow?
To best understand the impact of the loans, you need to know a few things:
- How much money are you borrowing?
- What are the terms of the loan?
- What will be your monthly payments? If you know the amount and term of the loan, then calculating the monthly payment is straightforward.
For “quick and dirty” cash flow projections, knowing the monthly payment is sufficient to know how much revenue (and cash) you need to earn each month to support your monthly payments.
If you are assembling an investor package to include financial projections (Pro-Forma Income Statement, Balance Sheet and Cash Flow Statement), then you will need to look at the numbers with more detail. You will need to know the following information:
- Total Annual Debt Service: this is monthly payments (principal and interest) times 12.
- Monthly and Annual Interest Expense: Each monthly payment has a portion allocated to repayment of the principal and a portion is interest expense. The interest expense will appear on the income statement and as a cash outflow on Cash Flows from Operations section of the Statement of Cash Flow.
- Monthly and Annual Principal Repayment: Each monthly payment has a portion allocated to repayment of the principal and a portion is interest expense. The principal repayment will appear on the Cash Flows from Financing section of the Statement of Cash Flow. Further the amount of principal repaid will be used to calculate the ending balance of what is owed on each loan at the end of the year; this will appear on the balance sheet.
- Ending Balances for the Balance Sheet: At the end of each month, quarter and year, what do you still owe on each loan?
This worksheet calculates all the information you need for both the "Quick and Dirty" cash flow projections as well as the more detailed investor packages.
Need more help? Download our debt service calculator to calculate all these numbers for up to 5 loans. For even more support, we offer a half-hour phone consultation with screen-share to coach you through the use of this template.
Recipe Card: Vegetarian Sweet Potato Burgers
Download the two-sided, full-color recipe card with a detailed description of sweet potatoes, expert storage tips and an illustrated recipe for Vegetarian Sweet Potato Burgers from The Farmers Market Cookbook.
For best results, we recommend taking the files to your local printer and printing on cardstock.
Recipe Card: Eggplant Curry
Download the two-sided, full-color recipe card with a detailed description of eggplant, expert storage tips and an illustrated recipe for Eggplant Curry from The Farmers Market Cookbook.
For best results, we recommend taking the files to your local printer and printing on cardstock.
Recipe Card: Watermelon and Goat Cheese Salad with Minty-Citrus Vinaigrette
Download the two-sided, full-color recipe card with a detailed description of watermelon, expert storage tips and an illustrated recipe for Watermelon and Goat Cheese Salad with Minty-Citrus Vinaigrette from The Farmers Market Cookbook.
For best results, we recommend taking the files to your local printer and printing on cardstock.