Please respond to the following discussion question. Your response should fully address all elements of the question and be a minimum of 200 to 300 words long. Cash flow is key to a business’ success and survival. A company must be able to answer at least two basic questions about their cash flow: 1. What is my cash balance right now? 2. What do I expect my cash balance to be six months from now? This question is not about your personal cash flow details. What are some examples in your experience of cash flow projection methods in your company or companies that you have worked for in answering these questions? You can perform an Internet search on “cash flow projections” for ideas.

QUESTION 1 DISCUSSION

My cash flow at the beginning of this month is $10,000.  The cash coming in for my business is $7000, for sales, credit sale is $ 1000, making a total of $8000 cash in a single month. For the money going out, inventory costs amount to $4000, Rent is equal to $1000, wages equal $500, utility expenses is similar to $100, phone expenses equals $30, and insurance is identical to $50. The total cash out is equal to $5680. The total cash at the end of the month will be $12, 320. Assuming that the money flowing out and flowing in the business remains constant each month, then after six months, I expect the total cash flow of $73, 920. I can conclude that the company will make tremendous profits in the next six or more months to come. The gains will be seven times the cash flow I have right now. The cash flow analyses give an overview of the real business picture in the months to come. It provides an authentic representation of cash flowing in and out of business in a given month.

The cash flowing out of business is lower compared to the cash flowing in which means that the business is making profits. What I need to concentrate in is how I can increase the money coming into the business and minimize the money flowing out to yield higher business profits. These predictions have not included other miscellaneous expenses or unforeseen expenses that might affect the total cash flow in the business for future months. Therefore, the figure is just an approximation of the full cash flow in a given month. The cash flow projection, however, shows that the company will make huge profits due to a high cash flow into the business compared to the cash flow out of business.