Cash Flow Def

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About Cash flow

1. Definition:

The actual movement of cash within a business; the analysis of how much cash is needed and whenthat money is required by a business within a period of time.

Example:

Cash flow is essentially the movement of money into and out of your business; it's the cycle of cashinflows and cash outflows that determine your business' solvency.

Cash flow analysis is the study of the cycle of your business' cash inflows and outflows, with thepurpose of maintaining an adequate cash flow for your business, and to provide the basis for cash flowmanagement.

Cash flow analysis involves examining the components of your business that affect cash flow, such asaccounts receivable, inventory, accounts payable, and credit terms. By performing a cash flow analysison these separate components, you'll be able to more easily identify cash flow problems and find waysto improve your cash flow.

A quick and easy way to perform a cash flow analysis is to compare the total unpaid purchases to thetotal sales due at the end of each month. If the total unpaid purchases are greater than the total salesdue, you'll need to spend more cash than you receive in the next month, indicating a potential cashflow problem.

Doing a cash flow analysis of your accounts receivable will show you which customers are slowpayers.

2. Preparing a Cash Flow Forecast

Preparing a monthly cash flow forecast provides you with the opportunity to show dollar figures,representing revenues and expenses, in the month the business expects to collect and spend the cash.

2.1. Why Should You Prepare a Cash Flow Forecast?

A cash flow forecast shows the critical whens of cash coming in and cash going out during a certainmonth. Preparing a monthly cash flow forecast provides you with the opportunity to show dollarfigures, representing revenues and expenses, in the month the business expects to collect and spend thecash. A cash flow forecast does not show sales estimates or overhead expenses averaged across severalmonths.

Used properly, this will provide you with the means to keep your business decision-making on trackand your inventory purchasing in control. It will also serve as an early warning indicator when your

expenditures are running out of line or your sales targets are not being met.

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As the manager of your cash, you will have enough time to devise remedies for anticipated temporarycash shortfalls and ample opportunity to arrange short term investments for the business' temporarycash flow surpluses.

The completed cash flow forecast will clearly show a bank loans officer (or yourself) what additionalworking capital, if any, the business may need, and will offer proof that there will be sufficient cash onhand to make the interest payments to support a revolving line of credit (to cover the shortfalls). If the

performance projections are realistic, they will also provide support for the feasibility of a term loanfor an equipment purchase or for a master marketing campaign.

Computer spreadsheet programs such as Microsoft Excel, Lotus 123 or any of a variety of full-facetedbusiness software can be very useful for cash flow worksheet development.

Reliable cash flow projections can bring a sense of order and well-being to your business and more

calm to your life. The most important tool owners/managers have available to control the financialaspects of their business is the cash flow worksheet .

2.2. Why Should You Prepare a Cash Flow Forecast?

Step one: Consider your Cash Flow Revenues

Find a realistic basis for estimating your sales each month.

For new operations, the basis can be the average monthly sales of a similar-sized competitor'soperations who is operating in a similar market It is recommended that you make adjustments for this

year's predicted trend for the industry. Be sure to reduce your figures by a start-up year factor of about50% a month for the start-up months. There are also publications available in libraries and book storesthat discuss methods of sales forecasting.

For existing operations, sales revenues from the same month in the previous year make a good base forforecasting sales for that month in the succeeding year. For example, if the trend readers in theeconomy and the industry predict a general growth of 4% for the next year, it will be entirelyacceptable for you to show each month's projected sales at 4% higher than your actual sales the

previous year. Include Notes to the Cash flow to explain any unusual variations from previous years'numbers.

If you sell products on credit terms or with instalment payments, you must be careful to enter only thepart of each sale that is collectible in cash in the specific month you are considering (realized accountsreceivable). Any amount collected after 30 days will be termed Collections on Accounts Receivableand will be shown in the month in which it will be collected.

It is critical to the credibility of your plan that any sales made should only be entered once the cash isreceived in payment. This is the critical test principle of the cash flow and should be applied wheneveryou are in doubt as to what amount to enter and when.

Step two: Consider your Cash Flow Disbursements

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Project each of the various expense categories (that would normally be shown in your ledger)beginning with a summary for each month of the cash payments to trade suppliers (accounts payable).Again, follow the principle that there should not be any averaging or allocating of these inventory

purchases (trade payables).

Each month must show only the cash you expect to pay out that month to your trade suppliers. For

example, if you plan to pay your supplier invoices in 30 days, the cash payouts for January's purchaseswill be shown in February. If you can obtain trade credit for longer terms, then cash outlays willappear two or even three months after the stock purchase has been received and invoiced.

An example of a different type of expense is your insurance expenditure. Your commercial insurancepremium may be $2400 annually. Normally, this would be treated as a $200 monthly expense. But thecash flow will not see it this way. The cash flow wants to know exactly how it will be paid. If it is to

be paid in two instalments, $1200 in January and $1200 in July, then that is how it must be entered onthe cash flow worksheet. The exact same principle applies to all cash flow expense items.

Once total cash collections, total cash payments on goods purchased, and any other expected expenseshave been estimated for each individual month of operation, it is necessary to link the cash flow statusof each month to the cash flow status and activity of the preceding and succeeding months (i.e. thereconciliation).

Step Three: Reconciliation of the Cash Revenues to Cash Disbursements

The reconciliation section of the cash flow worksheet begins by showing the balance carried over fromthe previous months' operations. To this it will add the total of the current month's revenues andsubtract the total of the current month's expenditures. This adjusted balance will be carried forward to

the first line of the reconciliation portion of the next month to become the base to which the nextmonth's cash flow activity will be added and/or subtracted.

3. Making the Best Use Of Your Cash Flow

Cash flow plans are living entities and must constantly be modified as you learn new things about yourbusiness and your paying customers. Since you will use this cash flow forecast to regularly compareeach month's projected figures with each month's actual performance figures, it will be useful to have asecond column for the actual performance figures right alongside each of the planned columns in the

cash flow worksheet. As the true strengths and weaknesses of your business unfold before your eyes,actual patterns of cash movement emerge. Look for significant discrepancies between the planned andactual figures.

For example, if the business' actual figures are failing to meet your cash revenue projections for threemonths running, this is an unmistakable signal that it is time to revise the year's projections. It may benecessary to delay the stock replenishment plan, or apply to the bank to increase the upper limit ofyour revolving line of credit. Approaching the bank to increase an operating loan should be done wellin advance of the date when the additional funds are required. Do not leave cash inflow to chance.

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4. Designing A Cash Flow Worksheet

There are a variety of ways a cash flow forecast can be structured. To gain the optimum benefit, it isrecommended that it be structured to show only revenues from operations, and the proceeds from salesof company assets, if appropriate, in the revenues portion of the worksheet.

On occasion a prepared format will show a slot for proceeds of a term loan in this section; this may,however, take away from the value of the cash flow as an indicator of the business' operating

performance and of the cash flow's ability to clearly show the real amount of working capital needs. Ifa fixed term loan amount is treated as revenue to the business, the balances carried forward each monthcannot accurately reflect how the business is earning money (unless the reader takes the additional stepof subtracting the loan proceeds from the equation).

Your general format should allow a double width column along the left side of the page for the accountheadings, then two side by side vertical columns for each month of the year, beginning from the monthyou plan to open (e.g. the first dual column might be labelled April Planned and April Actual etc.).

From there, the cash flow worksheet breaks into three distinctive sections. The first section (at the topleft portion of the worksheet, starting below and to the left of the month names) is headed CashRevenues (or Cash In). The second section, just below it, is headed Cash Disbursements (or Cash Out).The final section, below that, is headed Reconciliation of Cash Flow.

Example:

ITEM April April May MayPlanned Actual Planned Actual

Cash Revenues

Total Cash Revenues $40 $10 $75 $35

Cash Disbursements

Total CashDisbursements $50 $60 $60 $70

Reconciliation of

Cash FlowOpening CashBalance $0 $0 ($10) ($50)

Add: Total CashRevenues $40 $10 $75 $35

Deduct:Total CashDisbursements $50 $60 $60 $70

Closing CashBalance (carry ($10) ($50) $5 ($85)

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forward to next month)

Possible "Cash Revenues" sub-headings:

Cash RevenuesCash Sales from main product lines

Cash Sales from auxiliary product linesCash from Services ProvidedCollection from Accounts ReceivableProceeds from Sale of Fixed AssetsOther Operations Cash RevenuesTotal Cash Revenues

Possible "Cash Disbursements" sub-headings:

Cash DisbursementsCash Payments to Trade Suppliers of main product linesCash Payments to Trade Suppliers of auxiliary product linesManagement DrawsFull-time Salaries and WagesPart-time and Casual Salaries and WagesSales Commissions and/or Royalties PaidCash Dividends PaidAdvertising and Promotion Expense PaidProfessional Fees Paid (legal, audit, courses and consulting)

Business Licenses Registrations and Permits PaidPatents, Trademarks and Distribution Agreement Fees PaidRental of Premises PaymentsRental (or lease) Payments for Equipment and FurnishingsOther Rental Payments (including vehicles)Motor Vehicle Expenses PaidInsurance Premiums Paid (premises, equipment, vehicles)Repair and Maintenance Expenses Paid (premises, equipment, vehicles)Utilities (electric, gas, and water) Payments

Communications (telephones, data line and fax) PaymentsPostal (mail, courier, telegrams, etc.) Expense PaymentsCash Payments on Store/Office SuppliesOther Business Expenses (not elsewhere listed)Interest (and Principal) Payments on Term Loans/MortgagesInterest Payments on Operating LinevFederal Tax Payments (duties, tariffs, income, etc.)Provincial Tax Payments (income etc.)Municipal Tax Payments (property etc.)Total Cash Disbursements.

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Possible Reconciliation of Cash flow sub-headings:

Reconciliation of Cash Flow

Opening Cash BalanceAdd: Total Cash RevenuesDeduct: Total Cash Disbursements

Surplus or Deficit on this Month's OperationsClosing Cash Balance(to be carried forward to next month).

The difference between the cash in- and out-flows within a given period indicates the net cash flow.When this net cash flow is added to or subtracted from opening bank balances, any likely short-term

bank funding requirements can be ascertained.

Fluxul de numerar

Definitie:

(1) Intr-un sens financiar mai larg, este o analiza a tuturor modificarilor care afecteaza contul denumerar (cash account) in timpul unui exercitiu financiar. Este un indicator al diferentei dintrenumerarul incasat si cel platit de catre o companie in timpul unui exercitiu financiar. Fluxul denumerar se calculeaza pe baza datelor din contul de profit si pierdere pe trei categorii de surse:venituri din exploatare, venituri din investitii, venituri financiare. Cu semn pozitiv, el indicacapacitatea companiei de a-si onora platile independent, fara a apela la alte active curente sau lacredite. Fluxul de numerar este urmarit de investitori, fiind sursa platii dividendelor.

a) Cash-flow-ul din activitile de exploatare are un rol determinant pentru evoluia viitoare a

firmei, ntruct aceste activiti sunt componente principale ale veniturilor, iar acest flux esteprincipala resurs de finanare a produciei, a investiiilor i de achitare a dividendelor ctre acionari.

Fluxul de numerar din activitatea de eploatare se structureaz pe dou segmente, de ncasri i pli ianume:

* ncasri din vnzarea bunurilor i prestarea de servicii;* ncasri din redevene, onorarii, comisioane i alte venituri;* pli ctre furnizorii de bunuri i servicii;* pli ctre i n numele angajailor;* ncasri i pli ale unei societi de asigurare pentru prime i despgubiri, anuiti i alte

beneficii din polie de asigurare;

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* pli sau restituiri de impozite pe profit care nu pot fi identificate pe activitile de investiii ifinanciar;* ncasrile i plile provenite din contracte ncheiate n scopuri de plasament sau detranzacionare.

b) Cash-flow-ul specific activitilor de investiii pune n eviden pe de-o parte msura n care

aceste activiti s-au autofinanat, iar pe de alt parte sumele cheltuite pentru investiii pot generafluxuri pozitive de numerar n viitor. ncasrile i plile specifice cash-flow-ului investiional pot fi:

* plile efectuate pentru achiziionarea de active corporale i necorporale pe termen lung,precum i cele executate n regie proprie;* ncasrile din vnzarea de terenuri, cldiri, instalaii, echipamente i active necorporaleachiziionate anterior pe termen lung;* plile pentru achiziia de instrumente de capital propriu i de crean ale altor firme iinteresele n asocierile n participaie (altele dect plile pentru aceste instrumente consideratea fi echivalente ale numerarului sau acelea pstrate cu scop de plasament i de tranzacionare);

* ncasrile din vnzarea de instrumente de capital propriu i de crean ale altor ntreprinderi iinteresele n asocierile n participaie (altele dect ncasrile pentru acele instrumenteconsiderate a fi echivalente ale numerarului sau acelea pstrate n scopuri de plasament i detranzacionare);* avansurile n numerar i mprumuturile efectuate ctre alte pri;* ncasrile din rambursarea avansurilor i mprumuturilor efectuate ctre alte pri;* plile n numerar pentru contractele futures, forward, contractele de opiuni i contracteleswap, n afar de cazul n care contractele sunt deinute n scop de plasament sau detranzacionare sau cnd plile sunt clasificate drept activiti de finanare;

* ncasrile n numerar din contracte futures, contracte forward, contracte de opiuni sau deswap, n afara cazului n care contractele sunt deinute n scopuri de plasament sau detranzacionare sau cnd ncasrile sunt clasificate drept activiti de finanare.

c) Cash-flow-ul din activitile de finanare pune n eviden evoluia viitoare a numeraruluiprovenit din partea finanatorilor externi. Componentele acestui flux se refer la:

* veniturile obinute din emisiunea de aciuni i alte instrumente de capital propriu;* plile efectuate ctre acionari pentru achiziia sau rscumprarea aciunilor firmei;* veniturile monetare din emisiunea de bonuri de tezaur, obligaiuni, credite, ipoteci i altemprumuturi pe termen scurt sau lung;* rambursrile ale unor sume importante;* plile n numerar ale locatarului pentru reducerea obligaiilor legate de o operaiune deleasing financiar.

Cash inflow: orice forma de venituri in numerar, curente sau viitoare, aduse de o investitie sauo activitate a companiei.

Cash outflow: orice forma de cheltuieli in numerar, curente sau viitoare, cauzate de o investitiesau o activitate a companiei.

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(2) La fondurile de investitii este suma neta a banilor investiti intr-un fond de catre investitori. Uniianalisti considera ca portofoliile care beneficiaza de influxuri constante de numerar au performanteridicate.

Fluxul de Numerar (Cash Flow) al unei firme se poate intocmi (realiza) prin una din cele 2 metode :1. Metoda directa in care se iau in considerare platile si incasarile facute in cursul unui an

2. Metoda indirecta in care se porneste de la profit si se ajusteaza cu toate elementelenemonetare (ex. cheltuieli cu amortizarea, venituri/cheltuieli cu provizioane, etc.).

A. Metoda direct

Conform acestei metode se opereaz cu ncasri i pli brute n numerar.

a) Fluxurile de numerar provenite din activitile de exploatare: ncasrile n numerar din vnzrile de bunuri i prestrile de servicii; ncasrile n numerar provenite din redevene, onorarii, comisioane i alte venituri (care se

pot estima pe baza mrimii cifrei de afaceri realizate, corectate cu modificarea soldului creanelorcomerciale din exerciiul financiar);

pli n numerar ctre furnizorii de bunuri i servicii (materii prime i materiale consumabile,ct. 601 + 602 7412; alte cheltuieli materiale, ct. 603 + 604 + 606 + 608; alte cheltuieli din afar, cumsunt cele cu energia i apa, ct. 605 7413; cheltuieli privind mrfurile, ct. 607; cheltuieli privind

prestaiile externe, ct. 611 + 612 + 613 + 614 + 621 + 622 + 623 + 624 + 625 + 626 + 627 + 628 7416). Mrimea acestora se ajusteaz cu variaia soldului stocurilor de materii prime, materialeconsumabile i mrfuri prin adugarea diferenei dintre stocul final i cel iniial, respectiv cu variaiasoldului datoriilor comerciale (ct. 401+403) prin scderea diferenei dintre soldul final i cel iniial alexerciiului financiar;

pli n numerar ctre i n numele angajailor (cheltuieli cu personalul ajustate cu variaiasoldurilor conturilor necorespunztoare);

pli n numerar sau restituiri de impozit pe profit, doar dac nu pot fi identificate n mod

special cu activitile de investiii i de finanare (se refer la cheltuielile privind impozitul pe profit, ct.691791, dac se presupune c ntregul impozit pe profit este aferent activitii de exploatare).b) Fluxurile de numerar provenite din activitile de investiii:

plile n numerar pentru achiziionarea de terenuri i mijloace fixe, active necorporale i alteactive pe termen lung. Se pot determina pe baza creterilor de active imobilizate prezentate n nota 1 lasituaiile financiare i se ajusteaz cu variaia datoriilor ntreprinderii ctre furnizorii de imobilizri;

pli n numerar pentru achiziia de instrumente de capital propriu i de creane ale altorntreprinderi. Se pot identifica n valoarea creterii elementelor de activ respective prezentate n nota 1la situaiile financiare;

ncasri n numerar din vnzarea de terenuri i cldiri, instalaii i echipamente, activenecorporale i alte active pe termen lung;

ncasri n numerar din vnzarea de instrumente de capital propriu i de creane ale altorntreprinderi;

avansuri n numerar i mprumuturile efectuate ctre alte pri; ncasri n numerar din rambursarea avansurilor i mprumuturilor efectuate ctre alte pri.

c) Fluxurile de numerar provenite din activitile de finanare:

venituri n numerar din emisiunea de aciuni i alte instrumente de capital propriu. Sedetermin pe baza creterii capitalului social, inclusiv a primelor de capital (ct. 1041 + 1042 + 1043 +1044) i se ajusteaz cu variaia creanelor privind capitalul subscris i nevrsat;

plile n numerar ctre acionari pentru a achiziiona sau a rscumpra aciunilentreprinderii. Se regsesc n scderea capitalului social i a rezervelor;

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veniturile n numerar din emisiunea de obligaiuni, credite, ipoteci i alte mprumuturi. Suntconstituite din creterea mprumuturilor i datoriilor asimilate, nregistrate de ntreprindere n conturileaferente, veniturile din dobnzi i alte cheltuieli financiare oglindite n contul de profit i pierdere;

plile n numerar ale locatarului pentru reducerea obligaiilor legate de o operaiune deleasing financiar. Se determin pe baza analizei contractelor de leasing.

Fluxurile de numerar - total

Numerar la nceputul perioadei; Numerar la finele perioadei.

Rezultanta fluxurilor de numerar din activitile de exploatare, de investiii i de finanare

reprezint trezoreria net.

B. Metoda indirect

IAS 7 i OMFP nr. 94/2001 prezint metoda indirect ca alternativ la metoda direct dedeterminare a fluxurilor de trezorerie. Particularitatea acestei metode const n faptul c profitul net(sau pierderea net) este ajustat() cu efectele tranzaciilor ce nu au natur monetar, amnrile sauangajamentele de pli sau ncasrile n numerar din exploatare trecute sau viitoare i elemente de

venituri i cheltuieli asociate cu fluxurile de numerar din activitile de investiii sau de finanare.Situaia fluxurilor de numerar prin metoda indirect se prezint n felul urmtor:

a) Fluxuri de numerar din activiti de exploatare: rezultatul net; modificrile pe parcursul perioadei ale capitalului circulant; ajustri pentru elementele nemonetare i alte elemente incluse n activitile de investiii sau

de finanare.b) Fluxuri de numerar din activiti de investiii:

plile n numerar pentru achiziionarea de terenuri i mijloace fixe, active necorporale i alteactive pe termen lung;

ncasrile n numerar din vnzarea de terenuri i cldiri, instalaii i echipamente, active

necorporale i alte active pe termen lung; plile n numerar pentru achiziia de instrumente de capital propriu i de crean ale altor

ntreprinderi; ncasrile n numerar din vnzarea de instrumente de capital propriu i crean ale altor

ntreprinderi; avansurile n numerar i mprumuturile efectuate ctre alte pri; ncasrile n numerar din rambursarea avansurilor i mprumuturilor efectuate ctre alte pri.

c) Fluxuri de numerar provenite din activiti de finanare: veniturile n numerar din emisiunea de aciuni i alte instrumente de capital propriu; plile n numerar ctre acionari pentru a achiziiona sau a rscumpra aciunile

ntreprinderii; veniturile n numerar din emisiunea de obligaiuni, credite, ipoteci i alte mprumuturi; rambursrile n numerar ale unor sume mprumutate;

plile n numerar ale locatarului pentru reducerea obligaiilor legate de o operaiune deleasing financiar.

Fluxuri de numerar - total

Numerar la nceputul perioadei; Numerar la finele perioadei.

Rezultatul obinut prin aplicarea metodei indirecte este acelai ca i cel obinut prin metoda

direct, difer ns structura fluxurilor de numerar referitoare la activitile de exploatare.

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Fluxurile de numerar din activitile de investiii i cele din activitile de finanare suntdeterminate prin metoda direct.

Prin metoda indirect, pornind de la valoarea contabil a rezultatului exerciiului financiar, suntefectuate ajustri pentru determinarea fluxului de numerar. Se are n vedere c prin practicarea uneicontabiliti de angajament sunt nregistrate veniturile i cheltuielile n momentul facturrii lor i nu nmomentul ncasrii sau plii, iar n calculul profitului sunt luate n considerare unele elemente devenituri i cheltuieli nemonetare, care nu presupun intrri sau ieiri de numerar din trezorerie, ceea ceface s creasc diferena dintre mrimea rezultatului realizat i mrimea numerarului din trezorerie.

Prin efectuarea ajustrilor se urmrete: eliminarea efectelor contabilitii de angajament prin luarea n considerare a capitalului de

lucru net. Ca atare, din rezultatul exerciiului se scade variaia stocurilor (materii prime i materialeconsumabile, producia n curs de execuie, produse finite i mrfuri, avansuri pentru cumprarea destocuri), variaia creanelor (creane comerciale i alte creane) i se adaug variaia datoriilor deexploatare (decalajele de pli favorabile ntreprinderii puse n eviden de variaia soldurilor conturilorcorespunztoare);

eliminarea veniturilor i cheltuielilor nemonetare (amortizrile i provizioanele constituite sau

reluate pe venituri) prin adunarea cheltuielilor calculate cu amortizarea i provizioanele constituite iscderea veniturilor din reluarea provizioanelor (practic, se adun toate rubricile de ajustri din contulde profit i pierdere: ajustarea valorii imobilizrilor corporale i necorporale; ajustarea valorii activelorcirculante; ajustri privind provizioanele pentru riscuri i cheltuieli; ajustarea valorii imobilizrilorfinanciare i a investiiilor financiare deinute ca active circulante);

eliminarea acelor elemente de venituri i cheltuieli care nu sunt legate de activitatea deexploatare.

Privind metoda de calcul a fluxurilor de trezorerie IAS 7 recomand metoda direct, aceastafurniznd informaii utile pentru estimarea fluxurilor viitoare de trezorerie, iar prin metoda indirectaceste informaii nu sunt disponibile. n practic ns, ntreprinderile prefer metoda indirect ntruct

are o logic de calcul mai apropiat de formatul raportrilor contabile.

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Cash Flow Def

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