Cash Flow Statement - Example 1

Murray Wilson's 200X Forecasted Cash Flow Statement:

Below illustrates Murray's 200X Forecasted Cash Flow Statement.  You may click on the highlighted text (left hand side of your screen) to find out which Financial Budget was used to arrived at the monthly values/numbers.  Following the Cash Flow Statement is a further explanation of each component.   Recall, Murray is planning to start his business in July and has selected a year-end of December 31.  As a result, his first year cash flow statement will only show six (6) months of data (July to December).

SCHOLARSHIP INFORMATION SERVICES
FORECASTED CASH FLOW STATEMENT
FROM JULY 1, 200X to DECEMBER 31, 200X
ASSUMPTIONS: JULY AUG. SEPT. OCT. NOV. DEC. TOTALS
Forecasted Sales in units 4,000 4,000 4,000 4,000 4,000 4,000 4000 units
Monthly Sales Percentages 18% 23% 24% 13% 10% 12% 100%
Units Sales per Month 720 920 960 520 400 480 4000 units
Selling Price Per Unit Sold $26 $26 $26 $26 $26 $26
Total Cost per Unit $3 $3 $3 $3 $3 $3

CASH INFLOWS:






From Sales $18,720 $23,920 $24,960 $13,520 $10,400 $12,480 $104,000
Cash at Beginning of Month $ 7,500 $ 2,237 $10,056 $18,690 $17,060 $12,767
Total Cash Available $26,220 $26,157 $35,016 $32,210 $27,460 $25,247

CASH DISBURSEMENTS:






Direct Material Purchases $ 0 $4,644 $2,868 $1,692 $1,236 $1,416 $11,856
Promotional Pamphlets $4000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 4,000
University Advertising $ 0 $ 0 $2000 $2,000 $2,000 $2,000 $ 8,000
Newspaper Advertising $4,333 $4,333 $4,333 $4,333 $4,333 $4,333 $25,998
Office Salaries $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $15,600
Employer Costs $ 286 $ 286 $ 286 $ 286 $ 286 $ 286 $ 1,716
Office Supplies $2,500 $ 0 $ 0 $ 0 $ 0 $ 0 $ 2,500
Business Cards, etc. $ 250 $ 0 $ 0 $ 0 $ 0 $ 0 $ 250
Printing of Checks $ 75 $ 0 $ 0 $ 0 $ 0 $ 0 $ 75
Telephone $ 200 $ 200 $ 200 $ 200 $ 200 $ 200 $ 1,200
Legal Fees $1,200 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,200
Message Centre $ 767 $ 767 $ 767 $ 767 $ 767 $ 767 $ 4,600
Toll Free Services $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $ 9,600
Credit Card Service $ 832 $ 832 $ 832 $ 832 $ 832 $ 832 $ 4,992
Bank Charges $ 40 $ 40 $ 40 $ 40 $ 40 $ 40 $ 240
Miscellaneous $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ 1,800
Income Taxes $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Cash Withdrawals $ 500 $ 500 $ 500 $ 500 $ 500 $ 500 $ 3,000
Equipment Purchased $4,500 $ 0 $ 0 $ 0 $ 0 $ 0 $ 4,500
Total Disbursements $23,983 $16,102 $16,326 $15,150 $14,694 $14,874 $101,127

ENDING CASH BALANCE $ 2,237 $10,056 $18,690 $17,060 $12,767 $10,373

As you can see, the company's 200X Forecasted Cash Flow Statement consists of Five main components; namely, the Heading, the Assumptions, Cash Inflows, Cash Outflows, and the Ending Cash Balance.  For a complete examination of the five components of Murray's 200X Forecasted Cash Flow Statement, please click HERE.

Below summaries the actual Financial Budgets that need to be completed before you can develop your Forecasted Cash Flow Statement(s).

Budget Name Required to Determine Your Forecasted....
Sales Budget Monthly Cash Paid to You by Customers
Cash Investment Budget Business's Beginning Cash
Purchase Budget Monthly Payment on Purchases
Operating Expenses Budget Monthly Payment on Operating Expenses
Income Tax Rate & Budget Payment on Income Taxes
Withdrawal/Dividends Budget Payment for Drawings or Dividends
Fixed Asset Budget Payment for Fixed Asset Purchases
Interest Expense Budget Payment on Interest for Additional Financing

 

In our example, Murray would have used the above Financial Budgets to develop the his 200X Forecasted Cash Flow Statement.

ADDITIONAL EXAMPLES ON FORECASTED CASH FLOW STATEMENTS

J&B Incorporated
The Internet Company
The Maple Syrup Company

 
For further information, please refer the section entitled "The Cash Flow Statement"

Categories: Forecasting