Cash flow forecast and shortfall: How we calculate
Review three monthly cash balances and any funding gap.
How we calculate
Each month closes at opening cash + receipts − payments. Funding need is the largest negative closing balance in this three-month scenario; timing within a month is omitted. Funding need also includes a negative opening cash balance.
What the figures mean
- Cash flow
Money received less money paid during a period. It can differ from accounting profit; investment outlays are negative and receipts positive.
Simple example: €1,000 received less €700 paid gives a cash flow of +€300.
Worked example
These illustrative inputs let you check the method. They are not figures for a real company or automatically current tax rates.
Inputs
- Opening cash balance
- 10,000
- Month 1 receipts
- 20,000
- Month 1 payments
- 25,000
- Month 2 receipts
- 22,000
- Month 2 payments
- 18,000
- Month 3 receipts
- 20,000
- Month 3 payments
- 21,000
Results
- Funding need
- 0
- Lowest balance
- 5,000
- Closing balance
- 8,000
Change assumptions in the calculator and compare outcomes. Money follows your input unit; figures from different periods need adjustment before comparison.