Download - Cash Flow Forecasts Student Worksheet
Cash flow forecasts Student Worksheet
Cash flow forecasts Student worksheetactivity 1.
Putting theory into practice
You are a business adviser and you have been approached by a former All Black looking to start up an inner-city gym. He has given you his financial figures (below) and needs a financial forecast for the first six months of operation.1. Fill in the template to provide your client with a cash flow forecast.Former All Blacks financialsInitial investment$150,000
Gym sales price $99Joining Fee
Monthly membership fee $86
Estimated salesEstimated costs
January100 xLaunch event$50,000
February75 xEquipment$100,000
March50 xRent$5,000a month
April75 xStaff$140,000per annum
May60 xUtilities$3,000a month
June60 xOther expenses$2,000a month
1. Cash flow forecast
JANFEBMARAPRMAYJUN
OPENING BALANCE
CASH IN
Gym fees
Media fees
TOTAL
CASH OUT
Launch
Asset spend
Rent
Wages
Power, etc.
General expenses
TOTAL
NET CASHFLOW(+/-)(+/-)(+/-)(+/-)(+/-)(+/-)
CLOSING BALANCE(+/-)(+/-)(+/-)(+/-)(+/-)(+/-)
1. Will the former All Black lose money in the first month?
2. If he signs up an average of 40 new clients each month between July and December, will he see a return on his investment by Christmas?3. He has the option to rent his gym equipment for $6,000 a month. On that basis:
a) When will his $100,000 equipment investment break even?
b) If he was planning to sell off the business as a going concern after two years, is buying or renting the equipment the better option?
Activity 1 - Answers
1. Cash flow forecast
JANFEBMARAPRMAYJUN
OPENING BALANCE150,000-3,167-2,35927411,83227,065CASH IN
Gym fees18,50022,47524,30033,22536,90042,060
CASH OUT
Launch50,000-----
Asset spend100,000-----
Rent5,0005,0005,0005,0005,0005,000
Wages11,66711,66711,66711,66711,66711,667Power etc.3,0003,0003,0003,0003,0003,000
Gen. expenses2,0002,0002,0002,0002,0002,000
TOTAL171,66721,66721,66721,66721,66721,667NET CASHFLOW-153,167+808+2663+11,558+15,223+20,393
CLOSING BALANCE-3,167-2,359+274+11,832+27,065+47,458
2. Will the former All Black lose money in the first month?
YES3. If he signs up an average of 40 new clients each month between July and December, will he see a return on his initial investment by Christmas?YES, OCTOBER4. He has the option to rent his gym equipment for $6,000 a month. On that basis:
c) When will his $100,000 equipment investment break even?
d) If he was planning to sell off the business as a going concern after two years, is buying or renting the equipment the better option?
a) 17 MONTHS FROM NOW b) BUYINGFind out more with Business.govt.nz:
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Next steps:
Cash flow forecasting Introduction to raising capital Can you afford to start a business Finding sources of capital SWOT analysis Assess if you are ready to start upPAGE 2More education resources from business.govt.nz/resources/educational-resources