Forecasting Cash Flow for J&B Example 2
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J&B INCORPORATED |
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| ASSUMPTIONS: | MAY | JUNE | JULY | AUG. | SEPT. | OCT. | NOV. |
| % of Total Sales per month | 8% | 7% | 7% | 8% | 8% | 10% | 9% |
| Total Unit Sales/ Month) | 928 | 812 | 812 | 928 | 928 | 1,160 | 1,044 |
| Diskette Sales (note 26) | 186 | 162 | 162 | 186 | 186 | 232 | 209 |
| CD Sales (note 26) | 603 | 528 | 528 | 603 | 603 | 754 | 679 |
| Internet Sales (note 26) | 139 | 122 | 122 | 139 | 139 | 174 | 157 |
| Weighed Average Selling Price (note 1) | $67.61 | $67.61 | $67.61 | $67.61 | $67.61 | $67.61 | $67.61 |
| Product Cost Inflation Rate | 10% | 10% | 10% | 10% | 10% | 10% | 10% |
| CASH INFLOWS: | MAY | JUNE | JULY | AUG. | SEPT. | OCT. | NOV. |
| Cash From Product Sales (100%) | $62,753 | $54,909 | $54,909 | $62,753 | $62,753 | $78,441 | $70,597 |
| Less: Bad Debt (1%) (note 12) | $ 628 | $ 549 | $ 549 | $ 628 | $ 628 | $ 784 | $ 706 |
| NET CASH INFLOWS | $62,125 | $54,360 | $54,360 | $62,125 | $62,125 | $77,657 | $69,891 |
| CASH OUTFLOWS: | |||||||
| Purchase of Diskettes (note 27 a) | $ 0 | $ 9,540 | $ 0 | $ 0 | $ 0 | $ 0 | $ 9,540 |
| Purchase of CD (note 27 b) | $ 0 | $ 5,500 | $ 0 | $ 0 | $ 5,500 | $ 0 | $ 0 |
| Credit Card Charges (note 27 c) | $ 3,193 | $ 2,794 | $ 2,794 | $ 3,193 | $ 3,193 | $ 3,991 | $ 3,592 |
| Packaging Charges (note 27 d) | $ 505 | $ 442 | $ 442 | $ 505 | $ 505 | $ 631 | $ 568 |
| Actual Shipping Charges (note 27 e) | $ 1,554 | $ 1,360 | $ 1,360 | $ 1,554 | $ 1,554 | $ 1,943 | $ 1,748 |
| Toll Free Charges (note 27 f) | $ 1,863 | $ 2,033 | $ 1,779 | $ 1,779 | $ 2,033 | $ 2,033 | $ 2,541 |
| Commission on Sales (note 27 g) | $ 936 | $ 1,021 | $ 893 | $ 893 | $ 1,021 | $ 1,021 | $ 1,276 |
| Product Miscellaneous (note 27 h) | $ 510 | $ 447 | $ 447 | $ 510 | $ 510 | $ 638 | $ 574 |
| Advertising (note 3) | $14,167 | $14,167 | $14,167 | $14,167 | $14,167 | $14,167 | $14,167 |
| Wages & Employee Benefits (note 4) | $13,694 | $13,952 | $13,952 | $13,952 | $13,952 | $13,952 | $13,952 |
| Research & Development (note 19) | $10,425 | $10,453 | $10,453 | $10,453 | $10,453 | $10,453 | $10,453 |
| Casual Labour (note 5) | $ 900 | $ 0 | $ 0 | $ 900 | $ 0 | $ 0 | $ 0 |
| Office Supplies (note 6) | $ 0 | $ 0 | $ 412 | $ 0 | $ 0 | $ 412 | $ 0 |
| Rent (note 7) | $ 1,102 | $ 1,102 | $ 1,102 | $ 1,102 | $ 1,102 | $ 1,102 | $ 1,102 |
| Telephone/Fax (note 8) | $ 320 | $ 340 | $ 340 | $ 340 | $ 340 | $ 340 | $ 340 |
| Professional Services (note 9) | $ 292 | $ 333 | $ 333 | $ 333 | $ 333 | $ 333 | $ 333 |
| Business Insurance (note 10) | $ 1,815 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
| Toll-free Charges above Variable (note 11) | $ 1,864 | $ 2,033 | $ 1,779 | $ 1,779 | $ 2,033 | $ 2,033 | $ 2,541 |
| Miscellaneous Charges (note 15) | $ 233 | $ 233 | $ 233 | $ 233 | $ 233 | $ 233 | $ 233 |
| Taxes Payable (note 20) | $31,728 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
| Office Furniture (note 17) | $ 0 | $ 2,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
| Office Equipment (note 18) | $ 0 | $ 8,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
| Internet Storage & Accounts (note 14) | $ 170 | $ 170 | $ 170 | $ 170 | $ 170 | $ 170 | $ 170 |
| Dividends Paid (note 28) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $30,000 |
| TOTAL CASH OUTFLOWS | $85,271 | $75,919 | $50,656 | $51,864 | $57,100 | $53,453 | $93,132 |
| Net Cash Flow (Deficiency) | $-23,145 | $-21,560 | $3,704 | $10,261 | $ 5,026 | $24,204 | $-23,241 |
| Plus Beginning Cash Balance (note 21) | $61,968 | $38,823 | $17,263 | $20,967 | $31,228 | $36,254 | $60,457 |
| ENDING CASH BALANCE | $38,823 | $17,263 | $20,967 | $31,228 | $36,254 | $60,457 | $37,217 |
The remaining five (5) months of J&B's third year Forecasted Cashflow Statement is presented below. Recall this is not the correct procedure - the third year cashflow statement should be developed in a spreadsheet program and should appear on one page.
| J&B INCORPORATED CASH FLOW STATEMENT DECEMBER 1, 200Y - APRIL 30, 200Z |
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| ASSUMPTIONS: | DEC. | JAN | FEB. | MARCH | APRIL | TOTALS |
| % of Total Sales (per month) | 8% | 7% | 10% | 9% | 9% | 100% |
| Total Unit Sales/ Month) | 928 | 812 | 1,160 | 1044 | 1044 | 11,602 |
| Diskette Sales (note 26) | 186 | 162 | 232 | 209 | 209 | 2320 |
| CD Sales (note 26) | 603 | 528 | 754 | 679 | 679 | 7541 |
| Internet Sales (note 26) | 139 | 122 | 174 | 157 | 157 | 1740 |
| Weighed Average Selling Price(note 1) | $67.61 | $67.61 | $67.61 | $67.61 | $67.61 | |
| Product Cost Inflation Rate | 10% | 10% | 10% | 10% | 10% | |
| CASH INFLOWS: | DEC. | JAN | FEB. | MARCH | APRIL | TOTALS |
| Cash From Product Sales (100%) | $62,753 | $54,909 | $78,441 | $70,597 | $70,597 | $784,411 |
| Bad Debt (1%) (note 12) | $ 628 | $ 549 | $ 784 | $ 706 | $ 706 | $ 7,844 |
| NET CASH INFLOWS | $62,125 | $54,360 | $77657 | $69,891 | $69,891 | $776,567 |
| CASH OUTFLOWS: | TOTALS | |||||
| Purchase of Diskettes (note 27 a) | $ 0 | $ 0 | $ 0 | $ 0 | $ 1,908 | $ 20,988 |
| Purchase of CD (note 27 b) | $ 5,500 | $ 0 | $ 0 | $ 4,125 | $ 0 | $ 20,625 |
| Credit Card Charges (note 27 c) | $ 3,193 | $ 2,794 | $ 3,991 | $ 3,592 | $ 3,592 | $ 39,911 |
| Packaging Charges (note 27 d) | $ 505 | $ 442 | $ 631 | $ 568 | $ 568 | $ 6,311 |
| Actual Shipping Charges (note 27 e) | $ 1,554 | $ 1,360 | $ 1,943 | $ 1,748 | $ 1,748 | $ 19,428 |
| Toll Free Charges (note 27 f) | $ 2,287 | $ 2,033 | $ 1,779 | $ 2,541 | $ 2,287 | $ 24,985 |
| Commission on Sales (note 27 g) | $ 1,149 | $ 1,021 | $ 893 | $ 1,276 | $ 1,149 | $ 12,550 |
| Product Miscellaneous (note 27 h) | $ 510 | $ 447 | $ 638 | $ 574 | $ 574 | $ 6,381 |
| Advertising (note 3) | $14,167 | $14,167 | $14,167 | $14,167 | $14,167 | $170,000 |
| Wages & Employee Benefits (note 4) | $13,952 | $13,952 | $13,952 | $13,952 | $13,952 | $167,163 |
| Research & Development (note 19) | $10,453 | $10,453 | $10,453 | $10,453 | $10,453 | $125,411 |
| Casual Labour (note 5) | $ 900 | $ 0 | $ 0 | $ 0 | $ 900 | $ 3,600 |
| Office Supplies (note 6) | $ 0 | $ 412 | $ 0 | $ 0 | $ 412 | $ 1,650 |
| Rent (note 7) | $ 1,102 | $ 1,102 | $ 1,102 | $ 1,102 | $ 1,102 | $ 13,230 |
| Telephone/Fax (note 8) | $ 340 | $ 340 | $ 340 | $ 340 | $ 340 | $ 4,060 |
| Professional Services (note 9) | $ 333 | $ 333 | $ 333 | $ 333 | $ 333 | $ 3,958 |
| Business Insurance (note 10) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 1,815 |
| Toll-free Charges above Variable (note 11) | $ 2,287 | $ 2,033 | $ 1,779 | $ 2,541 | $ 2,287 | $ 24,985 |
| Miscellaneous Charges (note 15) | $ 233 | $ 233 | $ 233 | $ 233 | $ 233 | $ 2,800 |
| Taxes Payable (note 20) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 31,728 |
| Office Furniture (note 17) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 2,000 |
| Office Equipment (note 16) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 8,000 |
| Internet Storage & Accounts (note 14) | $ 995 | $ 170 | $ 170 | $ 170 | $ 170 | $ 2,865 |
| Dividends Paid (note 28) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 30,000 |
| TOTAL CASH OUTFLOWS | $59,461 | $51,292 | $52,405 | $57,717 | $56,176 | $744,444 |
| Net Cash Flow (Deficiency) | $2,665 | $3,068 | $25,252 | $12,174 | $13,715 | |
| Plus: Beginning Cash Balance (note 21) | $37,217 | $39,882 | $42,949 | $68,202 | $80,376 | |
| ENDING CASH BALANCE | $39,882 | $42,949 | $68,202 | $80,376 | $94,091 | |