Let’s return to the example of the wooden furniture business. In fact, a full-flg financial model of the company is more extensive than in the example present. The full version includes several tables or blocks that. Are responsible for different economic aspects within the company.
The example shows the first and main block of the financial model. Which demonstrates the method of generating revenue and a sales funnel. Desir income indicators, all types of expenses. And displays the final net profit. It is call the income and expense plan (IEP).
However, in addition to the PDS
A separate table or immiately after the calculation of income and expenses, the so-call cash flow plan (or PFD) of the company is carri out. The third separate information block of the financial model is the company’s balance sheet.
BDDS
Once we have identifi all expenses, income, optimiz key country wise email marketing list business indicators, and obtain the highest possible profit for the company with current resources, we can detail the model and create a cash flow plan.
The fact is that the income statement only gives an approximate result that the organization should achieve in a year. At the same time, revenue is most often not equal to all cash receipts, and profit is not equal to the balance of money in the cash register and in the accounts.
That is why the financial model should also include a cash flow plan. It is ne to understand whether the business has enough money at any given how to make text bigger in obsidian time to pay for all current expenses: purchase of raw materials, advertising, loans, etc. Therefore, the cash flow plan should be maintain on a monthly basis.
In order to correctly draw up not only a sales plan, but also a cash flow plan for the project, it is necessary to take into account current assets, as well as all expect inflows and outflows of funds:
- balances of money in accounts;
- revenue from the company’s core activities;
- accounts receivable – funds that customers owe to cmo email list the company – for example, if they bought goods on a deferr payment plan and pay for them within six months;
- accounts payable – funds that a company must transfer to counterparties, for example, a deferr payment for the purchase of materials and raw materials for our production;
- production costs;
- inflow of investments;
- payments of loans, taxes, duties and other expenses.
All inflows and outflows are record during the month
After that, all values can be summ up and the result can be analyz. The goal is to understand whether the company may face a cash gap at a certain point – a lack of money in the accounts. This can happen if there are significantly more outflows than inflows in a given month.
