Five Components of Murray's 200X Forecasted Cash Flow Statement:
1. THE HEADING
The heading is an extremely important part of the Cash Flow Statement. It communicates to the reader the name of the company, the type of statement that will follow (in this case, the statement will be the forecasted cash flow statement), and the date or range of months the statement pertains to.
Miscellaneous Expenses - from Operating Expense Budget
Murray recently ran into Bill, an old friend, who he hadn't seen for quite some time. In their conversation, Murray indicated that he was planning to start a business. Bill, a businessman for many years, thought it was his responsibility to offer Murray some helpful hints. Murray was quite grateful and listened intently. As the conversation was ending and both parties were saying their good byes, Bill said:
University Advertising Expense - from Operating Expense Budget
Case Study - "Scholarship Information Services"
Creating Your Forecasted Income Statement
After you complete the Financial Budgets (Step 1) and develop your First Year Forecasted Cash Flow Statement (Step 2), the next step is to develop your First Year Forecasted Income Statement (remember to create your forecasted financial statements one year at a time).
Creating Your Forecasted Ratio Analysis
Toll Free Services Expense - from Operating Expense Budget
BUDGET 4 - DEVELOPING YOUR DIRECT MANUFACTURING LABOR BUDGET
After the Purchase Budget has been Developed, the next step is to Develop Your Direct Manufacturing Budget. As the name implies, the Direct Manufacturing Labor Budget, is used ONLY by Manufacturing companies. Therefore, you may omit this Budget if your business is NOT considered a manufacturing company. If, on the other hand, your business involves manipulating raw materials into "finished" product, you will be required to develop a Direct Manufacturing Labor Budget.
Below is a Case Study that we will use to explain the entire process of business forecasting. A further discussion on business forecasting appears at the end of this article.
CASE STUDY EXAMPLE - "SCHOLARSHIP INFORMATION SERVICES"