1. Cash Flow Cash flow through your business as a result of three activities: – Operations – Investments – Finances We will only deal with cash flow relating to operations.

2. Cash Flow JuneJulyAugustSeptemberOctober Start Cash1,000500(2,000)01000 Cash In2,0001,0004,0003,0005,000 Cash Out2,5003,5002,000 3,500 Ending Cash500(2000)01,0002,500 Simplest cash flow statement

3. Cash Flow Operational cash in is the sales revenue for a given period of time. (The investment & finance income we are ignoring for now) Sales $ = Price x Quantity

4. Cash Flow JuneJulyAugustSeptemberOctober Start Cash1,000500(2,000)01000 Cash In2,0001,0004,0003,0005,000 Sales2,0001,0004,0003,0005,000 Cash Out2,5003,5002,000 3,500 Ending Cash500(2000)01,0002,500 Sales details added.

5. Cash Flow Operational cash out includes: – Cost of Goods Sold (COS) – Cost of inventory accumulation – Fixed costs (operational overhead) (Still, ignoring the investment and financial cash outs.)

6. Cash Flow JuneJulyAugustSeptemberOctober Start Cash1,000 500(2,000) 01000 Cash In2,0001,0004,0003,5005,000 Sales2,0001,0004,0003,5005,000 Cash Out2,5003,5002,0002,5003,500 COGS1,8002,000 1,0001,5002,500 Inventory 2001,000 300 Overhead 500 700 Ending Cash 500(2000) 01,0002,500 Cash Out details added.

7. Cash Flow JuneJulyAugustSeptemberOctober Start Cash1,000 500(2,000) 01000 Cash In2,0001,0004,0003,5005,000 Sales2,0001,0004,0003,5005,000 Investing 0 0 0 0 0 Financing 0 0 0 0 0 Cash Out2,5003,5002,0002,5003,500 COGS1,8002,000 1,0001,5002,500 Inventory 2001,000 300 Overhead 500 700 Investing 0 0 0 0 0 Financing 0 0 0 0 0 Ending Cash 500(2000) 01,0002,500 Investing and financing details added.