CASH FLOW FORECASTS

ALL BUSINESS REQUIRE LOANS ENABLE TRADE SUCCESFULLY

SHORT TERM LOANS REQUIRE PURCHASE SUPPLIES / BUSINESS NEGOTIATE LONGER TERM FINANCE MAJOR PROJECTS

MORE LIKELY LEND EVIDENCE FINANCIAL PLANNING REASSURING

REASURRING BANK MANAGEMENT KNOWS IMPORTANCE AVOID CASH FLOW CRISIS

MORE CONFIDENCE MAKE REPAYMENTS WHEN DUE

HIGH PROPORTION FAILURES DUE CASH FLOW DIFFICULTIES

CASH FLOW FORECAST HELP ACOID 

ENSURE BUSINESS DO NOT SUFFER PERIOD SHORT CASH / UNABLE PAY DEBTS

IDENTIFY NOT ENOUGH CASH - MAKE NECESSARY ARRANGEMENS FIX PROBLEM

CASH IN - MONTHLY BASIS

CASH OUT - STATE EXPENDITURE GOODS / SERVICES

NET MONTHLY CASH FLOW - OPENING / CLOSING BALANCE

TIMING KEY ISSUE UNDERPINNING MANAGEMENT

GUIDE MAKING DECISIONS

SEEK ENSURE SUFFICENT CASH INFLOWS PRIORT OUTFLOWS

HELP DECIDE BUSINESS IDEA PROFITABLE / VIABLE

LEVEL OUTPUT / SALES GENERATE PROFIT

SUPPORT APPLICATION LOAN

ASSESS IMPACT CHANGES LEVEL PRODUCTION

ASSES EFFECTS DIFFERNT PRICES

CONTRIBUTION = DIFFERENCE REVENUE AND VARIABLE COSTS

CONTRIBTUION = REVENUE - VARIABLE COSTS

USED PAY FIXED COSTS

BREAK EVEN OUTPUT = FIXED COSTS / CONTRIBUTION PER UNIT

FORECAST EFFECT VARYING NUMNERS / IMPLICATIONS CHANGE PRICE

SIMPLE - NO NEED TRAINING

QUICK - PROVIDE IMMEDIATE RESULTS

VALUE SUPPORTING BUSINESS APPLICATION BANK LOAN

NOTHING LEVEL OF SALES

SIMPLIFICATION REAL WORLD - CALCULATING AVERAGE UNLIKELY ACCURATE

DIFFICULT MULTIPLE PRODUCTS - DIVDE FIXED COSTS

COSTS DONT RISE STEADILTY

ONLY AS ACCURATE DATA

GROSS PROFIT MARGIN = GROSS PROFIT X 100 / REVENUE

ALLOWS COMPARISONS BETERRRN DIFFERENT BUSINESS

DOESNT INCLUDE COSTS

OPERATING PROFIT MARGIN = OPERATING PROFIT X 100 / SALES REVENUE

USEFUL INTERESTED PEFROMANCE BUSINESS 

HIGHER PROFIT MARGIN LEAD GREATER OVERALL PROFIT

CAN LEAD FALL MARGIN - REDUCE PRICES ATTRACT SALES HOPE HIGHER PROFIT

PROFIT YEAR MARGIN = PROFIT FOR YEAR X 100 / REVENUE

TAKES TAX / OTHER EXPENDITURE ACCOUNT

STRAIGHTFORWARD - TECHNOLOGY

USE RANGE FACTORS MAKE DECISIONS

REQUIRE LOAN - ESSENTIAL - IMPORTANT EVIDENCE

CONSIDER:

SUFFIENCT CAPITAL

EFFECT CASH FLOW

PRODUCT GENERATE PROFIT

OPPURTUNITY COSTS