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CASH FLOW FORECAST
SIMPLIFIED
1. Revenue and Cost Components
- Revenue drivers
- Cost drivers
- Tax
- Interest
These elements feed into the Income Statement Forecast.
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.
3. Profit Calculation and Adjustments
- Profit
- Depreciation
- Non-cash items added back
This contributes to Operational Cash Flow (Operational CF).
4. Investment Planning
- Maintenance and repair
- Useful lives
- Accumulated depreciation
These affect:
- Assets disposal
- Capex forecast
Leading to Investing Cash Flow (Investing CF).
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).
Final Output: Cash Flow Forecast
All cash flow components (Operational, Investing, and Financial CF) merge to form the final Cash Flow Forecast.