1. Cashflow Worksheet Micro-Pinoy

2. 2 Cashflows Click on the worksheet tab labeled “CASHFLOWS”. Go to Row 44 “Cash Surplus / Deficiency.” A positive figure in any of cells F44 to AC44 indicates a cash surplus, while a negative figure indicates a deficiency. A deficiency suggests that additional funds will be needed.

3. 3 Borrowings It is assumed that funds to cover for cash deficiencies of the microfinance operations will be provided by borrowings. In turn, these will have to be paid back with interest every three months. Step 1 Provide an estimate of the annualized composite cost (interest rate) of borrowings in cells F52. Assume that the bank’s composite cost of funds is 10% p.a. input 10% in cell F52.

4. 4 Borrowings Step 2 Select the term (number of months) of the loan. You may choose 6, 12, 18, or 24 months (cell F51). Assume that funds borrowed by the microfinance unit has a term of 12 months. Click cell F51, click the arrow, and select 12.

5. 5 Step 3 While watching the level of cash deficiency in cells F44 to AC44, input the amount of borrowings in cells F50 to AC50. Do this starting Month 1, Month 2, and so forth. The cash level in row 44 should be a surplus. If not, keep on changing the figures for each month until an acceptable cash surplus shows in cells F44 to AC44. Observe that as you input these figures in cells F50 to AC50, the figures in cells F44 to AC44 change automatically. Before proceeding, it might be helpful to study Step 4. (Input 260,000 in cell F50 or any figure in F50 to AC50, and observe how the balances of Cash Surplus/Deficiency are changed automatically. After doing this, erase all the figures you have inputted in row 50 for the next exercise.) Borrowings

6. 6 Step 4 There is another way of determining the “Amount of Borrowings” and Micro-Pinoy’s suggestion is to use the “Liquidity Ratio” as basis. It is a ratio comparing the cash and expected cash inflows against the anticipated cash outflows. Ideally, the total amount of cash inflows should be greater than the cash outflows. This means that you are able to meet the demands for cash (for loan disbursements, payment of salaries, debts, etc.). Thus, the ideal ratio should be greater than 1.00. You have to provide your “Desired Liquidity Ratio” in cell C264. Then, click the button so that Micro-Pinoy will provide the “Amount of Borrowings” automatically. If you do not wish to use the “Liquidity Ratio” as basis, you may skip this step (Step 4) and manually determine the amounts.

7. 7 Borrowings Step 4 (Cont’d) Input 1.05 in the box (cell C264). Then, click the adjacent button marked “CLICK HERE”. Step 5 If you make any further changes in your inputs (in any of the worksheets), always return to the cashflow worksheet to re- determine the “Amount of Borrowings” because these figures need to be updated. Remember, those amounts may have been based on previous assumptions. Thus any change in assumptions may necessitate that these be likewise changed. DO NOT FORGET TO REGULARLY UPDATE THIS LAST STEP.

8. 8 WARNING! Do not use the “Freeze Panes” option of Excel in the CASHFLOW worksheet. Otherwise the “CLICK HERE” button will not work properly. If this happens, unfreeze by choosing Window, then Unfreeze Panes in the Excel menu.

9. 9 Reminder Save File: It is prudent to save your work regularly in order to minimize the possibility of losing data. Save now. To Print: If you wish to automatically print the figures from months 1 to 24, click the button labeled “CLICK HERE To Print the Monthly Figures: adjacent to the top rows of the worksheet. On the other hand, if you wish to print only a summary, check the button labeled “Click here to print the summary”. It will print the figures (rounded-off to the nearest one-thousand) for: (a) Months 1 to 6; (b) Year 1; (c) Year 2 ; (d) Years 1 and 2 (consolidated).