- Writing a Business Plan
- Financial Statements
- Business Forecasting
- Business Checklist
4. EXCESS CASH (DEFICIENCY)
Excess Cash (deficiency) is calculated by subtracting the cash outflows from the cash inflows. If a positive figure results, then the company is considered to have excess cash (IE more cash is coming into the company than is leaving the company).
If, however, a negative figure results, then the company is considered to have a cash deficiency (I.E. more cash is leaving the company than is coming into the company). Below illustrates the monthly forecasted Cash Excess (Deficiency) for Red Deere Electronics.
|CASH EXCESS (Deficiency)||$8,250||$5,000||$5,750||$(2,000)||$9,100||$10,950|
As you can see, the company is anticipating Excess Cash in each month except in April where a cash deficiency is expected. In other words, the company is expecting more cash will enter the company each month (expect for April) then will leave the company.