Cash Flow Calculator
Forecast liquid cash positions and prevent insolvency. Unlike an accrual profit statement, this cash flow calculator tracks actual monetary cash inflows and disbursements across the month, calculating your true ending bank balance and cash burn rate.
Cash balance in business bank accounts at start of month
Customer cash receipts, collections, and loan proceeds
Supplier payments, payroll, rent, loan repayments, and taxes
Projected cash in bank accounts at month end
How to Use This Calculator
- Enter current bank account cash balance at the start of the period.
- Sum all expected cash receipts (customer invoice payments, cash sales, interest).
- Sum all scheduled cash outflows (payroll runs, vendor bills, rent, loan principal).
- Review ending cash balance to ensure adequate operating liquidity.
Formula & Calculation Methodology
Reconciles liquid cash movements by subtracting disbursements from receipts and adding to starting bank balance.
Worked Example
$65,000 starting cash with $85,000 inflows and $72,000 outflows
Frequently Asked Questions
Why do profitable companies often go bankrupt from cash flow failure?↓
Accrual accounting records profit when an invoice is sent, not when cash arrives. If clients take 90 days to pay while payroll and rent must be paid weekly, a company can run out of cash despite showing high accounting profits.
What is the difference between operating, investing, and financing cash flows?↓
Operating cash flow comes from core sales activities. Investing cash flow relates to buying or selling long-term equipment and property. Financing cash flow covers borrowing debt, repaying loans, and equity funding.
How many months of cash reserves should a small business maintain?↓
Financial planners recommend maintaining 3 to 6 months of fixed operating overhead in liquid cash reserves to cushion against economic shocks or delayed client payments.
What is the fastest way to resolve an immediate cash flow deficit?↓
Accelerate customer invoice collections by offering a 2% prompt-payment discount, request extended payment terms from major suppliers, or draw on a pre-approved revolving line of credit.
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Source Citation & Disclaimer
Informational tool only; not licensed tax, legal, or financial advice.