From The Co-Founders


Tips, Tactics & Strategic Insights and Commentary
from The ROI Co-Founders, Pat Johnson and Dick Outcalt
Outcalt & Johnson: Retail Strategists LLC; Retail Turnaround Experts

Retailer's 3-in-1 Cash Flow Calculator

Face it. Sales are dropping. By how much? For how long? Nobody knows for sure.

But, you can make some assumptions, some educated guesses. Put those into the 3-in-1 Cash Flow Calculator. 

  • Immediately see what that would mean for profits
  • And your buying plan. 
  • And most of all, your cash flow! 

These totally volatile times cause a lot of opinions and fears to be swirling around. Seeing "what if...?" can be very helpful. 

​All in just minutes. On your own. ​

Then, and this is the powerful part, consider what else you might do.

  • What changes could you make?
  •  What might each of those potential responses mean financially?

BTW, expect to be doing this many times, even sometimes in the middle of the night.

Go for it! It is all healthy. These totally volatile times cause a lot of opinions and fears to be swirling around. Showing "what if...?" can be very helpful.

Ready? You need to make only a few entries. Here's how to get started on your first draft. 

​Set June or later as the first month of your plan on the Profits tab.

Then, enter expected sales and margins for each month. Grim, we know, especially the first few months.

  • This will be a combination of what sales have typically been recently, plus the first draft of your adjusted sales plan. Be realistic.
  • Be sure to adjust the margins you expect, showing especially significant markdowns in the first months you are open – and an uptick in sales – as you clear out what has suddenly become old and excess inventory.

Then, make the entries for Expenses.
Here, you will enter each number just once, versus month by month. If you need some help on the "expense buckets", review the User's Guides here. 

See projected P&L for the year.
Scroll down to take a quick look at the P&L for the year. But don't linger (or freak out too much with the loss it shows.) Keep moving!


  • Next, on the Inventory tab, enter the inventory @cost you have on hand (again, close counts. Round off your numbers.)
  • Then, choose the Turn rate you expect.
  • And finally, be sure to enter all Inventory On Order for the month you expected to receive it. 

See Buying Plan
Scroll down to check out the Inventory Buying plan. Likely it will show you as being overbought; no surprise there. 

Okay, on to the third tab: Cash.

  • Enter the Inventory payables
  • Enter other payables you have now
  • If you have along term loan, enter the monthly payment amount (principal only.)
  • Finally, enter the cash on hand.

Now, this IS the page to linger on. Scroll down to see the Ending Cash Balance for each month. 

  • Any negative numbers you see represent a cash shortfall for that month.
  • And that is exactly what you need to know. 
  • And you know it now, while you still have time to do something about it!

That is, "How would cash flow be affected by changes I might make?"

  • What if you change sales assumptions? What about margins? Make those changes. Does it help?
  • Let's look at expenses. Renegotiate with the landlord? Reduce hours we're open? What about travel; lots of shows and events are being cancelled. Senior management take salary cuts?
  • Now look at inventory. Have we cancelled all open orders?
  • If we really focus on clearing out old merchandise – sharp markdowns – maybe we can increase our turns a bit? What does that do to cash?
  • Okay. Well, what else can raise turns? What if we change distributors to get faster turns?

What else can we do to improve our cash flow?

  • Can we get more dating from our vendors? Enter those amounts in the months you can defer payments. Then, based on your Ending Cash balances, when could you expect to pay it back? Can that work for you? 
  • Or, should we go ahead and take on some loans? (Lots of those are being talked about and offered.) But, they need to be repaid at some point; will we have the cash flow to make those payments when they start coming due?

When you see a plan that shows some promise, date it and print it out.

There IS a lot you can do besides worry!

​And thanks to the remarkable 3-in-1 Cash Flow Calculator, you immediately can see the impacts of any of your possible decisions, before any salaries have been cut or merchandise orders cancelled (or placed.) 

These are difficult times for us all. Retailing in particular is under enormous stress. Many feel like there are no good choices. 

But, there are good decisions. And The ROI is dedicated to helping you be able to make those good decisions for yourself. 

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