CASH FLOW FORECAST 
SIMPLIFIED

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1. Revenue and Cost Components 
- Revenue drivers 
- Cost drivers 
- Tax 
- Interest 

These elements feed into the Income Statement Forecast.

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2. Sales and Purchase Analysis 
- Sales 
- Purchases/COGS 
- DSO (Days Sales Outstanding) → Leads to AR Forecast 
- DPO (Days Payable Outstanding) → Leads to AP Forecast 
- DIO (Days Inventory Outstanding) → Leads to Inventory Forecast 

These forecasts impact Net Working Capital.

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3. Profit Calculation and Adjustments 
- Profit 
- Depreciation 
- Non-cash items added back 

This contributes to Operational Cash Flow (Operational CF).

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4. Investment Planning 
- Maintenance and repair 
- Useful lives 
- Accumulated depreciation 

These affect: 
- Assets disposal 
- Capex forecast 

Leading to Investing Cash Flow (Investing CF).

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5. Financing Activities 
- Current loan amortization 
- New financing 
- Dividend distribution 
- Stock issuance 

These contribute to: 
- Debt schedule 
- Equity schedule 

Leading to Financial Cash Flow (Financial CF).

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Final Output: Cash Flow Forecast 
All cash flow components (Operational, Investing, and Financial CF) merge to form the final Cash Flow Forecast.