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Cash-Flow Projection

Cash-Flow Projection. Purpose : T o predict the timing and amount of revenues and expenses. It projects when money will actually flow into the venture; example, Revenue from cash sales and accounts receivable.

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Cash-Flow Projection

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  1. Cash-Flow Projection

  2. Purpose: • To predict the timing and amount of revenues and expenses. • It projects when money will actually flow into the venture; example, Revenue from cash sales and accounts receivable. • It also projects when money will flow out of the business; example, Expenses for salaries, other expense and accounts payable. Cash-Flow Projection

  3. Cash-Flow Projection

  4. Exercise: • Toni has decided to set up a lawn care and pool maintenance business for the summer because she wants to work her own hours. • She estimates that she will need a start-up loan of $700 and monthly revenue as follows: April - $1500; May - $2000; June & July - $2500; August - $3500; and Sept. - $1000. • She needs to buy equipment worth $3500 and will spend $300 / month renting additional equipment. • She will hire help in May & June at $250/month and July & August at $350/month.

  5. Exercise: • In April she must pay Business License of $50 and Insurance of $400. • She will spend $50 in April & May for Advetising. • Additional monthly expense include $20/mo. for Office Supplies and $50/mo. for Miscellaneous Expenses. • Finally, she will take a Personal Drawings of $200/mo. For April through August and $300 for September.

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