Cash book

Month
Opening cash balance
Cash sale
Cash expense
Net cash flow
Closing cash balance

1
350,000
500,000
(500,000)
350,000

1
10,000
(5,000)
5,000

2
350,000
(750,000)
(750,000)
(400,000)

3
(400,000)
1,700,000
(750,000)
950,000
550,000

4
550,000
500,000
(500,000)
550,000

5
550,000
1,200,000
(750,000)
450,000
1,000,000

6
1,000,000
2,300,000
(250,000)
2,050,000
3,050,000

2
5,000
15,000
(7,000)
13,000

3
13,000
15,000
(15,000)
13,000

4
13,000
10,000
(7,000)
16,000

5
16,000
15,000
(15,000)
16,000

6
16,000
5,000
(20,000)
1,000

Stock-chart
Month
Opening
Production
Selling
Closing
Profit
Month
Opening profit
Profit in the month
Closing profit

Total expense each pack

Profit per pack

1
250,000
250,000
500,000

50
50

2
500,000
350,000
850,000

3
850,000
750,000
1,600,000

4
1,600,000
350,000
1,950,000

5
1,950,000
750,000
2,700,000

6
2,700,000
1,000,000
3,700,000

7
3,050,000
700,000
700,000
3,750,000

2.The farmer
A farmer grows rape seed on her farm. She has 40 hectares of usable land. She expects a yield of 8
should receive $100 cash per ton from the buyer, and $25 per tonne as a subsidy payment from th
Support budget. She grows one crop per year, which she sells in August. In September she buys and
at a price of $250 per ton. She buys fertiliser in November and March; 15 tons each time at $80 per
$450 per month and also pays $500 four times each year for assistance in seeding September, fertil
November, March and August. She pays rent of $1,500 in January, April, July and October, and tax
All transactions are in cash.
At the start of this growing season she had $3,000 in the bank.
SEEDS Finacial Planning
Mapping all the figures on a table
Input
Plant area
Productivity
Sales price
Support budget

Month
1. Opening balance
2. Cash in (Total)
Sales

40.00
8.50
100.00
25.00

September

3. Cash out (Total)

buys and plants seeds
buys fertiliser
Pays herself
for assistance
pays rent
Taxes
4. Net Cash flow (=Total Cash in-Total cash out)
5. Closing balance (=(1)+(4))
Profit from planting rapes (=2-3)
Profit of this season

3,000
0
0
(1,950)
-1000
0
-450
-500
0
0
(1,950)
1,050
-1,950
24,000

Question 1: profit that she expects to make this season is $24000

Question 2: She needs arrange an overdraft with her banker because her budget is declined from Oc
Question 3: She needs an overdraft from October of current year to July of next year
She needs a max overdraft is $-14550 . The overdraft should be made in the first disbursement from
with the amount of disbursement under above time line from October of current year to July of next

s of usable land. She expects a yield of 8.5 tons/hectare and

5 per tonne as a subsidy payment from the EU Agricultural
lls in August. In September she buys and plants seeds, 4 tons
and March; 15 tons each time at $80 per ton. She pays herself
or assistance in seeding September, fertilising and reaping in
anuary, April, July and October, and taxes of $1,700 in May.
ons are in cash.

Unit
Hectares
per Hectare
Ton
Ton

October

November
1,050
0
0
(1,950)
0
0
-450
0
-1500
0
(1,950)
(900)
-1,950

December
(900)
0
0

(3,050)
0
0

(2,150)
0
-1200
-450
-500
0
0
(2,150)
(3,050)
-2,150

(450)
0
0
-450
0
0
0
(450)
(3,500)
-450

because her budget is declined from October from current year to July of next year
year to July of next year
d be made in the first disbursement from October of current year
m October of current year to July of next year to save borrowing interest.

January

February

March

(3,500)
0
0

(5,450)
0
0

(5,900)
0
0

(1,950)
0
0
-450
0
-1500
0
(1,950)
(5,450)
-1,950

(450)
0
0
-450
0
0
0
(450)
(5,900)
-450

(2,150)
0
-1200
-450
-500
0
0
(2,150)
(8,050)
-2,150

April

May

Jun

(8,050)
0
0

(10,000)
0
0

(12,150)
0
0

(1,950)
0
0
-450
0
-1500
0
(1,950)
(10,000)
-1,950

(2,150)
0
0
-450
0
0
-1700
(2,150)
(12,150)
-2,150

(450)
0
0
-450
0
0
0
(450)
(12,600)
-450

July

August
(12,600)
0
0

(14,550)
42,500
42,500

(1,950)
0
0
-450
0
-1500
0
(1,950)
(14,550)
-1,950

(950)
0
0
-450
-500
0
0
41,550
27,000
41,550

Wholesale Phone Ltd

Cash Flow from overheads
Month
1. Opening balance
2. Cash in (Total)
Sales

$
$
$

1
2
36,000.00 $ 20,250.00
$
$
-

3. Cash out (Total)

Overdraft
Rent office
Furniture
Cars
Rates, Insurance etc
Tax
Services
Salaries and expenses
Sundries
4. Net Cash flow (=Total Cash in-Total cash out)

15,750.00

5. Closing balance (=(1)+(4))

20,250.00

$
$
$
$

1.00
15,000.00
15,000.00

$
2.00
$ 7,000.00
$ 24,000.00
$ 24,000.00

$
$
$

8,000.00
8,000.00
7,000.00

$ 15,000.00
$ 15,000.00
$ 9,000.00

7,000.00

$ 16,000.00

Cash Flow from purchases and sales

Period
1. Opening balance
2. Cash in (Total)
Sales
Account receivables
3. Cash out (Total)
Purchases
4. Net Cash flow (=Total Cash in-Total cash out)
5. Closing balance (=(1)+(4))

$
3,000.00
$
1,000.00
$
1,000.00
$
1,000.00
$
$
250.00
$
9,500.00
$
$ (15,750.00)

$ 14,750.00
$
$ 3,000.00
$
$ 1,000.00
$
$
250.00
$ 9,500.00
$ 1,000.00
$ (14,750.00)
5,500.00

Cash Flow

Period
1. Opening balance
2. Cash in (Total)

2 months
$ 36,000.00
$ 54,000.00

After
$ (78,500.00)
$ 141,000.00

Sales
Account receivables
3. Cash out (Total)
overheads
purchases and sales
Account payable
4. Net Cash flow (=Total Cash in-Total cash out)

54,000.00

5. Closing balance (=(1)+(4))

Opening banking balance (credit)

$ (78,500.00) $ 46,032.00
$ (12,468.00)
$ (90,968.00)

$ 168,500.00
$ 30,500.00
$ 138,000.00

$ 141,000.00
$ 16,468.00

$
$ 16,468.00
$ (114,500.00) $ 124,532.00

After 2 months, CF is $-78500

He had set up an overdraft limit of $80.000 with the bank, that was not enough, the opening banking balance is $-12468 so th
=> he has every right to be worried, very worried!

Wholesale Phones Ltd

Three shareholders, Sandra, Sumira and Ranjit, have just set up a small company that buys mobile phones from Asia
The early weeks were very hard, but the market was growing. Sales were very good, and all the owners' efforts were
The owners are in the boardroom when the receptionist interrupts them.
'Ranjit, phone the Bank Manager at once. Unless you talk to her, she will call our overdraft in.'
'What is she on about', said Sandra, 'does that mean I will have to cancel the order for my BMW?'
Ranjit went to his office. He had not really checked the cash position for two months.
He was a little worried. His records showed the following.
Opening bank balance - $12,468 credit
Overheads
Rent: Office $3,000 per month. Both months paid.
Furniture: $1,000 per month. One month paid.
Cars: $1,000 per month. One month paid.
Rates, Insurance etc: $1,000 per month. Both months paid.
Tax: $500 per month. None paid.
Services: $250 per month. Both months paid.
Salaries and expenses: $9,500 per month. Both months paid.
Sundries: $1,000 per month. One month paid.
Sales
Period 1: $15,000 All paid for.
Period 2: $24,000 All paid for.
Period 3: $30,000 Half paid for.
Period 4: $40,000 No payments received.
Period 5: $86,000 No payments received.

Purchases
Period 1: $8,000 Paid.
Period 2: $15,000 Paid.
Period 3: $15,000 Paid.
Period 4: $55,000 Paid.
Period 5: $45,000 Paid.
Was he right to be worried, and will Sandra get her car? He had set up an overdraft limit of $80,000 with the bank. S

After
$ 5,500.00
$
$
$ 16,468.00
$ 12,468.00
$
$ 1,000.00
$ 1,000.00
$
$ 1,000.00
$
$
$ 1,000.00
$ (16,468.00)
$ (10,968.00)

$
3.00
$ 16,000.00
$ 15,000.00
$ 15,000.00

$
4.00
$ 16,000.00
$
$
-

$ 15,000.00
$ 15,000.00
$
-

$
5.00 After
$ (39,000.00) $
$
$
$
$
$
$ 55,000.00 $ 45,000.00 $
$ 55,000.00 $ 45,000.00 $
$ (55,000.00) $ (45,000.00) $

$ 16,000.00

$ (39,000.00) $ (84,000.00) $

(84,000.00)
141,000.00
141,000.00
141,000.00
57,000.00

g balance is $-12468 so that the overdraft limit has larger $-90968

mobile phones from Asia and the sells them to wholesalers in Europe. Marketing and selling is done using the Internet. When the
he owners' efforts were put into buying and selling. Credit control was ignored, and Ranjit let the work on the cash flow forecas

80,000 with the bank. Surely that was enough?

using the Internet. When they started trading, Ranjit the Accountant, arranged an overdraft with the Bank for $100,000. They ha
ork on the cash flow forecast slip.

nk for $100,000. They had also deposited $36,000 in cash in return for the initial share issue.

The computer business

Chart 1 : purchase,stock and sales

Purchases
Sales by cash
Sales 2 weeks credit
Sales 3 weeks credit
Stock
profit 1 product

Week1
$
$

Week2
$
100.00
$
-

Week3
$
$
50.00
$
20.00

$
$
100.00
$
Chart 2: Cash flow statement
Week1
Week2
$
100,000.00 $ 99,700.00
$
$
$
$
-

3. Cash out (Total)

Rent office
Purchases computers
Pay an insurance
Pay wages

$
$

$
$

4. Net Cash flow (=Total Cash in-Total cash out)

5. Closing balance (=(1)+(4))

$
$

1. Opening balance
2. Cash in (Total)
Sales by cash
Sales 2 weeks credit
Sales 3 weeks credit

300.00
300.00

$ 60,950.00
$
300.00
$ 60,000.00
$
650.00

30.00

Week3
$ 38,750.00
$ 50,000.00
$ 50,000.00
$
-

300.00
300.00

(300.00) $ (60,950.00) $ 49,700.00

99,700.00 $ 38,750.00 $ 88,450.00

Chart 3: Profit Statement

Week1

Week2

Week3

Turn over

Cost for goods sold

$ 60,000.00

Over head

300.00

300.00

Profit
Total Profit

$
$

950.00

$ 70,000.00

(300.00) $ (60,950.00) $ 69,700.00

143,850.00

Week4
$
200.00
$
20.00

Week5
$
$
30.00

$
$

$
$

50.00
160.00

50.00
80.00

Week6
$
200.00

Week7
$
-

$
$

280.00

80.00
200.00

Week8
$
200.00
$
50.00

Week9
$
$
30.00

Week10
$
200.00
$
40.00

$
$

$
$

350.00

60.00
260.00

20.00
400.00

Week4
$ 88,450.00
$ 20,000.00
$ 20,000.00
$
$
-

Week5
$ 8,150.00
$ 50,000.00
$ 30,000.00
$ 20,000.00
$
-

Week6
$ 57,850.00
$
$
$
$
-

Week7
$ (44,950.00)
$ 50,000.00
$
$
$ 50,000.00

Week8
$ 4,750.00
$ 100,000.00
$ 50,000.00
$
$ 50,000.00

Week9
$ 14,450.00
$ 30,000.00
$ 30,000.00
$
$
-

Week10
$ 44,150.00
$ 120,000.00
$ 40,000.00
$
$ 80,000.00

$ 100,300.00
$
300.00
$ 100,000.00

$
$

$ 102,800.00
$
300.00
$ 100,000.00

$
$

300.00
300.00

$ 90,300.00
$
300.00
$ 90,000.00

$
$

$
$

$ (80,300.00) $ 49,700.00
$ 8,150.00 $ 57,850.00

$ (102,800.00) $ 49,700.00
$ (44,950.00) $ 4,750.00

$ 9,700.00
$ 14,450.00

$ 29,700.00
$ 44,150.00

$ 119,700.00
$ 163,850.00

Week4

Week5

Week6

Week7

Week8

Week9

Week10

$ 70,000.00

$ 80,000.00

$ 80,000.00

$ 50,000.00

$ 90,000.00

$ 60,000.00

$ 100,000.00

$ 100,000.00

$ 90,000.00

300.00

300.00

300.00

300.00

300.00
300.00

300.00

$ (30,300.00) $ 79,700.00

300.00
300.00

300.00
300.00

2,500.00

2,800.00

$ (102,800.00) $ 79,700.00

300.00

$ (40,300.00) $ 89,700.00

$ 59,700.00

1 month credit

Market Mike
Month
1. Opening balance
2. Cash in (Total)
Sales
Sales old stall
3. Cash out (Total)
Purchases
Payable
Personal drawings
Purchases new stall
Rent of the market stall patch
Total cash out:
4. Net Cash flow (=Total Cash in-Total cash out)
5. Closing balance (=(1)+(4))

1
2
$ (750.00) $ (780.00) $
$ 1,480.00 $ 1,530.00 $
$ 1,480.00 $ 1,530.00 $
$
$ 1,510.00 $ 1,570.00 $
$ 890.00 $
$ 830.00
$ 500.00 $ 500.00 $
$
$ 180.00 $ 180.00 $

3
(820.00)
1,730.00
1,580.00
150.00
2,470.00
1,040.00

4
$ (1,560.00)
$ 1,670.00
$ 1,670.00
$ 1,960.00
$ 1,190.00

500.00 $
750.00
180.00 $

500.00
270.00

$ (30.00) $ (40.00) $ (740.00) $ (290.00)

$ (780.00) $ (820.00) $ (1,560.00) $ (1,850.00)

5
6
$ (1,850.00) $ (2,120.00)
$ 1,760.00 $ 2,140.00
$ 1,760.00 $ 2,140.00
$ 2,030.00 $ 2,120.00
$ 1,260.00 $ 1,350.00
$

500.00 $

500.00

270.00 $

270.00

$ (270.00) $
20.00
$ (2,120.00) $ (2,100.00)
loan form bank this number from 1st month

The computer business

Chart 1 : purchase,stock and sales
Week1
Purchases
Sales
Stock
profit 1 product

Opening
Sales
Cost
Closing

Week2

Week3

0
100
0
0
0
100
0
Chart 2: Cash flow statement

0
70
30

Week1
Week2
Week3
$100,000
$99,700
$38,750
0
0
$50,000
$300
$60,950
$300
$99,700
$38,750
$88,450
Chart 3: Profit Statement
Week1

turn over
cost for goods sold
Over head
Profit

$0
$0
$300
($300)
$233,850

Week2

Week3
$0
$0
$950
($950)

$70,000
$42,000
$300
$27,700

Week4

Week5
200
70
160

Week4

Week6
0
80
80

Week5

$88,450
$20,000
$100,300
$8,150

Week4

200
0
280

Week6
$8,150
$50,000
$300
$57,850

Week5
$70,000
$38,000
$300
$31,700

Week7

$57,850
0
$102,800
($44,950)

Week6
$80,000
$40,000
$300
$39,700

Week8
0
80
200

Week7
Week8
($44,950)
$4,750
$50,000
$100,000
$300
$90,300
$4,750
$14,450

Week7
$0
$0
$2,800
($2,800)

200
50
350

Week8
$80,000
$40,000
$300
$39,700

$50,000
$25,000
$300
$24,700

Week9

Week10
0
90
260

200
60
400

$14,450
30000
$300
$44,150

Week10
$44,150
$120,000
$300
$163,850

$90,000
$45,000
$300
$44,700

Week10
$60,000
$30,000
$300
$29,700

Week9

Week9

$163,850
120300
$43,550

4.Ecocity Cars Ltd

Month
Sales forecast
Assembled forecast
Materials
Labour
Overheads
Cost of each car
Selling price
Month
1. Opening balance
2. Cash in (Total)
Sales 2 months credit
3. Cash out (Total)
Parts and materials
Labour
Overheads
4. Net Cash flow (=Total Cash in-Total cash out)
5. Closing balance (=(1)+(4))

-3

-2

10

30

$
10,000.00
$
2,000.00
$
100,000.00
$
12,000.00
$
25,000.00
Cash flow forecast
1
$
1,000,000.00
$
-

2
$ (4,520,000.00)
$
-

$
$
$
$
$
$

$
$
$
$
$
$

5,520,000.00
5,100,000.00
20,000.00
400,000.00
(5,520,000.00)
(4,520,000.00)

11,400,000.00
10,000,000.00
1,000,000.00
400,000.00
(11,400,000.00)
(15,920,000.00)

Profit forecast
Month
Turn over

1
$

250,000.00

2
$

750,000.00

Cost for goods sold

120,000.00

360,000.00

Over head

400,000.00

400,000.00

Profit
Total Profit

$
$

(270,000.00) $
21,520,000.00

(10,000.00)

-1

1
10
200

100

$
$
$
$
$
$
$
$
$

3
(15,920,000.00)
250,000.00
250,000.00
14,400,000.00
12,000,000.00
2,000,000.00
400,000.00
(14,150,000.00)
(30,070,000.00)

$
$
$
$
$
$
$
$
$

3
$

2,500,000.00

6 months of sales
2
3
30
100
500
1,000

4
(30,070,000.00)
750,000.00
750,000.00
16,800,000.00
14,000,000.00
2,400,000.00
400,000.00
(16,050,000.00)
(46,120,000.00)

$
$
$
$
$
$
$
$
$

5
(46,120,000.00)
2,500,000.00
2,500,000.00
19,200,000.00
16,000,000.00
2,800,000.00
400,000.00
(16,700,000.00)
(62,820,000.00)

$
$
$
$
$
$
$
$
$

6
(62,820,000.00)
5,000,000.00
5,000,000.00
3,600,000.00
3,200,000.00
400,000.00
1,400,000.00
(61,420,000.00)

5,000,000.00

$ 12,500,000.00

$ 25,000,000.00

4
200
1,200

5
500
1,400

1,200,000.00

2,400,000.00

6,000,000.00

400,000.00

400,000.00

400,000.00

900,000.00

2,200,000.00

6,100,000.00

$ 12,000,000.00
$

400,000.00

$ 12,600,000.00

6
1,000
1,600

7
1,200

8
1,400
-

9 Total
1,600
6,040
6,040