4.    EXCESS CASH (DEFICIENCY)

Excess Cash (deficiency) is calculated by subtracting the cash outflows from the cash inflows. If a positive figure results, then the company is considered to have excess cash (IE more cash is coming into the company than is leaving the company).

If, however, a negative figure results, then the company is considered to have a cash deficiency (I.E. more cash is leaving the company than is coming into the company). Below illustrates the monthly forecasted Cash Excess (Deficiency) for Red Deere Electronics.

As you can see, the company is anticipating Excess Cash in each month except in April where a cash deficiency is expected. In other words, the company is expecting more cash will enter the company each month (expect for April) then will leave the company.