Cash flow forecast
Cash flow forecast = Overview of all expected cash inflows and cash outflows for the coming
period.
! Depreciation is a cost, but not a payment !
How to make a cash flow forecast?
1. Determine receipts
2. Determine payments
3. Receipts – payments = increase/decrease of cash
Profit and loss account
Sales €10.000
Cost of sales – €5.000 -
Gross profit €5.000
Costs:
Depreciation €1.000
Interest + €400 +
= ….. € €1.400
Gross profit/loss - ….. €3.600
Cash flow forecast doesn’t include depreciation
Profit/loss account include depreciation
Economic Order Quantity
Q* = 2xDxF
C
Q* = Optimal order quantity
D = Total demand per period
F = Fixed ordering costs per order
c = Carrying costs per unit per period
Increase in carrying costs
= safety inventory x carrying costs per unit
Monthly carrying costs Economic Order Quantity
= Economic Order Quantity : 2 x carrying costs per order + other costs
Monthly ordering costs Economic Order Quantity
= (sales per month : Economic Order Quantity) x order costs per order
Cash flow forecast = Overview of all expected cash inflows and cash outflows for the coming
period.
! Depreciation is a cost, but not a payment !
How to make a cash flow forecast?
1. Determine receipts
2. Determine payments
3. Receipts – payments = increase/decrease of cash
Profit and loss account
Sales €10.000
Cost of sales – €5.000 -
Gross profit €5.000
Costs:
Depreciation €1.000
Interest + €400 +
= ….. € €1.400
Gross profit/loss - ….. €3.600
Cash flow forecast doesn’t include depreciation
Profit/loss account include depreciation
Economic Order Quantity
Q* = 2xDxF
C
Q* = Optimal order quantity
D = Total demand per period
F = Fixed ordering costs per order
c = Carrying costs per unit per period
Increase in carrying costs
= safety inventory x carrying costs per unit
Monthly carrying costs Economic Order Quantity
= Economic Order Quantity : 2 x carrying costs per order + other costs
Monthly ordering costs Economic Order Quantity
= (sales per month : Economic Order Quantity) x order costs per order
