SAMPLE CASH FLOW PROJECTION

A cash flow projection may be the most useful tool the small business owner can have.   Financial statements show profitability, but profitability is only one measure of business success.  Profitable businesses do fail every year for a lack of working capital.

A cash flow projection gives you an immediate understanding of what your cash (or working capital) position will be from month to month.  It’s a projection for the future, and it shows the timing of money coming in and going out of your business.  You will see if you’ll need to borrow money, and also when you will be able to pay down or pay off your loans.  And here’s another reason for having a cash flow prepared – your bank will want to see the projection in order to extend you credit.

Whether you are starting out or in business or have been operating for a while, this powerful tool lets you take steps when needed to maintain a healthy cash flow and a healthy business.