13 Week Cash Flow Modeling

The aim of this session is to produce a 13 week cash flow model which fully integrates to a 3 statement financial statement forecast. Both a direct and an indirect cash flow statement will be produced. The financials are produced for a variety of time periods, weekly, quarterly and annually. The actual financials are integrated so that the financial forecast is up to date and there is a variance analysis output section. The issues are the efficiency and integrity of the model.

Key topics

• Distressed considerations
• The difference between accruals based forecasting and cash based forecasting
• Understanding the components of COGS and SG&A
• Dealing with payroll expenditures
• Comparing actual with forecast
• Updating the forecast with actual data so that the forecast rolls forward
• Issues associated with forecasting sales
• Drivers of cash receipts and where they differ from sales
• Expenses and disbursements
• Cash disbursements versus expenses
• Building copyable formulae, how to make this happen effectively
• Tower models versus matrix models
• Debtor in possession (DIP) revolvers and excess cash
• The significance of using BASE analysis for integration of balance sheet and direct statement cash flow
• The issue of ensuring a receivables number that works when stress tested for seasonal sales
• Understanding the link between inventories and payables
• Dealing with write downs in the debt schedule
• Building the direct statement cash flow statement
• Building the indirect statement cash flow
• Linking cash/DIP into the balance sheet
• Complete the interest items in the income statement
• Controlling the circularity
• Dealing with actual data so the forecast rolls forward in time
• Building output pages
  • Quarterly financial statements
  • Variance analysis