Part 2 - Doing a complete Cash Flow Projection
To do a complete Cash Flow Projection, you need to create forecasts for the line items in these six main categories:
• Sales
• Expenses
• Debt Service
• Investments / Capital Expenditures
• Working Capital
• Other Cash Flow
Sometimes you will be forecasting rates or percentages instead of dollar amounts. Gross margin is an example of this, as is Payroll tax %. You’ll find that the rate has been calculated for you in the history time periods, so you can see what it has been before deciding what to use going forward.
Sales