cash flow presentation 1q14
TRANSCRIPT
Cash Flow Forecasting
David J. Housey
Businesses fail because events occurred just as planned.
• Capitalization
• Expansion
• Strategy Change 1 of 13
Cash Flow is #1!
2 of 13
To forecast the end… 3 of 13
…forecast all that proceeds it
4 of 10
Profit and Loss Statement
Jan
Profit and Loss Statement
….
Profit and Loss Statement
Dec FYE13
Revenue 91,200 729,600 2,827,200
Cost of Sales 24,990 199,920 774,690
Gross Margin 66,210 529,680 2,052,510
Operating Exenses 14,102 62,866 361,972
Net Income 920 401,734 1,007,298
Cash Flow
5 of 13
Is Not
Net Income
Enough Rope to Hang Himself
Case: beverage manufacturer
– I need $250,000 – NO
– I earned half a million dollars but don’t
have any cash? – YES
– Go as far as you can see and from there
you will see further.
6 of 13
7 of 10
BALANCE SHEET
Jan
ASSETSCurrent Assets
Cash (114,470)Accounts Receivable 45,600Inventory 24,990Deposits on Production 56,228Other Current Assets 8,800
Total Current Assets 21,148
Non Current AssetsFixed Assets 255,572
BALANCE SHEET
….
BALANCE SHEET
Dec
(472,872)364,800199,920149,94035,200
276,988
989,444Total Non Current Assets 255,572
TOTAL ASSETS 276,720
989,444
1,266,432
8 of 13
Growing to Bankruptcy
Case: technology developer / manufacturer
– Long cash conversion cycle
– Insufficient capitalization
– You cannot wake a person who is
pretending to be asleep.
9 of 13
10 of 10
CASH FLOW STATEMENT
Jan
Operating Activities:Net Income 920Adjustments:
Depreciation and Amortization 1,428Inventories (19,990)Deposits on Production (56,228)Accounts Receivable (45,600)Other current assets 0
CASH FLOW STATEMENT
….
CASH FLOW STATEMENT
Dec
401,734
5,71200
(159,600)(8,800)
Net cash provided by operating activities (119,470)
Investing Activities:Capital Expenditures 0
239,046
(257,000)Net cash provided by investing activities 0
Financing Activities:
(257,000)
Proceeds from debt issuance 0 (16,667)Net cash provided by financing activities 0
Change in cash and equivalents (119,470)
Beginning Cash 5,000
Ending Cash (114,470)
(16,667)
(34,621)
(438,251)
(472,872)
11 of 13
Of
“Cheap” Supply Chain
Case: importer / exporter
– Terms 2/10, net 30
– ½ COGS 90 days, ½ 150 days
– A wealth of information creates a
poverty of attention.
12 of 13
13 of 13
What is
Measured is
Managed
