Cash Flow Calculator
Cash flow analysis can be difficult because income and expenses occur at irregular intervals making it hard to get a true statement of net cash flow.
This calculator works for both business and personal finances to project your monthly and annual net cash flows. It converts all the irregular payments into monthly equivalents so you can budget and know your free cash flow position with confidence.
Simply complete each of the six sections and the calculator will automatically forecast the cash flow analysis. To figure a budget you can just go back and edit your entries until your projections look acceptable then click on the "Create Report" button at the bottom of the worksheet for a printable report.
Managing Personal Cash Flow
Cash is very important in running a business or household. Without cash it is impossible to operate. A cash flow analysis is a financial report of all the cash that in coming in (inflows) and the cash that are going out (outflows) of a business or household operation. Cash flow can be used as an indication of a company’s financial strength. On the personal side, a cash flow shows your income and expenses and determines whether you are “living within your means” or having to borrow money each month. You will know if you are living within your means if after adding all your cash inflow and subtracting the total cash outflow from the total inflow, you will get a positive figure. To help you with this exercise, use the cash flow calculator above. If you find from this analysis that you spend more than you make, then it may be time to look at your lifestyle and make some corrections.
Cash Flow Problems
Cash flow is vital to a person’s survival. Without strong, positive cash flow an entity will never sustain and grow. Having enough cash on hand will ensure that creditors, household expenses and others can be paid on time. A person is considered broke if he does not have enough cash to support his day-to-day living expenses. A negative cash flow is indicative of a cash flow problem. Excessive debt, non-payment or late payment of bills and using the credit card for paying your day-to-day purchases are some indications that you have a cash flow problem.
Improving Cash Flow
If you are experiencing a negative cash flow, the best way to approach cash flow problem is by re-examining your spending habits and the way your monthly cash flow works. This doesn’t necessarily mean that you need to spend less or earn more. It just means that you need to correct on how you’re spending your monthly cash inflow. Most people who want to improve their cash flow can do so by just managing their cash flow differently.
Proper cash flow management means paying cash, instead of using credit cards, for everything such as home improvements, cars, furniture, vacations, children’s education and other living expenses. The best way to increasing cash flow around the house is to develop a vigilant attitude toward cutting costs, no matter how small. One of the biggest problems we see in financially distressed consumers is that people waste a lot of money on the little things.
Overall, the best way to increase your personal cash flow is to be conscious of how much money you spend and why. Start tracking, observing and controlling your cash outflow every month. Think about what you’re doing as a consumer, instead of simply reacting to impulses. You’ll see results immediately, as soon as you get serious about it. And don’t forget to keep an emergency fund to ensure you do not disrupt your cash flow should an emergency arise.
Managing Cash Flow
Managing cash flow is not just about having positive net income. If you cannot live within your means, you will not be able to generate the surplus money needed each month to invest for your future financial goals. We need to make enough income so we can live comfortably while saving up for our retirement. And if you cannot do that, you will not be able to meet your aspirations in life. It’s a choice you have to make now.
Cash Flow Terms and Definitions
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