EXERCISE: PREPARING A CASH FLOW FORECAST Year 1 Forecast Sales $ 96,000 Purchases 48.000 Gross profit 48,000 Expenses Ad & Promo 2,500 Auto 1,400 Electricity 1,200 Insurance 2,000 Licenses 60 Professional fees 800 Rent/Lease 4,800 Sub Contract (labour) 3,000 Telephone 750 Total Expenses 16,510 Net Profit 31,490 Notes/Assumptions Sales JAN: $0 FEB: $2,000 MAR: $ 4,000 APR: $ 6,000 MAY: $ 8,000 JUN: $ 12,000 JUL: $16,000 AUG: $ 16,000 SEP: $ 12,000 OCT: $ 10,000 NOV: $6,000 DEC: $ 4,000 Start-up warehouse inventory purchase - COD in January: $6,000* Purchases/GOGS Inventory 50% per sale) taken in month of sale, paid in 30 days Ad & Promo: Jan - $1,000 May - $200 June - $500 July - $500 August - $300 Auto: $50 per month for gas_repairs $400 in June and Sep Electricity: paid every 2nd month beginning in February, plus $100 installation deposit in Insurance-paid in February Licenses - Business registration- January Prof. fees - $300 for Lawyer and $500 for Accountant in January Rent/Lease-paid monthly (First and last month paid in January) Sub-contract labour - half in July, half in August Telephone - $50/month_$150 installation fee* - Jan, plus $200 deposit in Jan Owner's draw - $2,000 per month Computer & Software purchased in Jan. $4,000* Owner's Investment: $10,000 at start-up *-denotes start-up cost Customer payment terms: BLUE Group - all sales cash GREEN Group -50% - Cash sales, 50% paid in 30 days RED Group - 50% paid in 30 days, 50% paid in 60 days YELLC Group sales paid days February March April May June July August September October November December TOTAL 1 CASH FLOW BUDGET PLANNER 2 Months January 3 Cash in: Current(COD) 4 30 days 5 60 days 6 90 days 7 Other : 8 Investments 9 Loan proceeds 10 Total Cash In: 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 Cash Out: 13 Purchases 14 Ad & Promo 15 Auto Expense 16 Electricity 17 Insurance 18 Licenses 19 Professional Fees 20 Rent 21 Sub-contracts 22 Telephone 23 Drawings 24 Computer 25 Misc. 26 Bank Charges 27 Other: 28 29 Total Cash Out 30 31 Cash In 32 Forward 33 Available 34 Cash Out 35 Over/(Under) 3R 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0