Cash Flow

What it's for

A business can be profitable on paper (positive P&L) and still go bankrupt due to lack of cash — because it receives money after paying, or because a month with higher expenses weighs heavily before revenue compensates. Cash Flow exists to check exactly that: if, month by month, there will always be enough cash on hand to pay the bills.

This exercise has no data of its own to fill in — it is entirely calculated from Revenues, Expenses, Personnel, and Funding Sources (including debt service for any financing), using the rates defined in Financial Assumptions.

How to read the table

The Projected Cash Flow table follows a fixed structure, month by month (and annually, over the horizon):

• Beginning Cash Balance — how much cash was on hand at the start of the period (the first month comes from the Initial Cash Balance defined in Assumptions).

• Inflows — Revenues (already net of delinquency, called "Effectively Received Revenues") and Contributions and Financing (the money coming in from each Funding Source, in the month it is recorded).

• Outflows — Revenue Taxes, Direct Costs (COGS), Expenses (General and Marketing), Personnel, and Debt Service (interest and amortization of financing registered in Funding Sources).

• Period Result — Total Inflows minus Total Outflows for that month.

• Ending Cash Balance — Beginning Balance + Period Result; becomes the Beginning Cash Balance for the following month.

As with Revenues, use the Consolidated / Full Monthly toggle to choose the level of detail, and Excel to export.

How to use for decisions

The most important number to monitor is the Ending Cash Balance month by month: if it turns negative at any point, the business needs more working capital at that moment, even if the annual result is positive. This usually happens in the first few months, before revenue reaches cruising altitude, or in months of heavy investment without corresponding revenue.

Tips

• If the ending balance turns negative in any month, first review Funding Sources (lack of working capital) and the timing of Expenses/Investments — the problem isn't always the business itself, sometimes it's just the timing.

• Compare the Cash Flow with the P&L for the same period: if the two tell very different stories, it's usually due to delinquency, revenue seasonality, or debt payment — all items that affect cash but not (or not in the same way) the accounting result.

• This report automatically recalculates whenever you edit Revenues, Expenses, Personnel, Funding Sources, or Assumptions — there's no need to manually "update".