3-in-1 INTEGRATED Cash Flow Calculator
From the same few entries, projected monthly Profit & Loss statement, plus Inventory Buying Plan ("Open-to-Buy"), plus integrated Cash Flow projection.
Ready? Here's how to get started on your first draft.
You need to make only a few entries; the 3-in-1 Cash Flow Calculator auto-magically does the number-crunching for you.
The PROFITS Tab
Set any month as the first month of your 12-month plan on the Profits tab. (Don't worry about the calendar year; start with June or July or whenever your stores will have re-opened.)
Then, enter expected sales and margins for each month. Grim, we know, especially the first few months.
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.
Take a look at the projected P&L for the 12 months.
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. You want to quickly get to your first draft.
The INVENTORY Tab
See Buying Plan
Scroll down to check out the Inventory Buying plan. Likely it will show you as being overbought; no surprise there. Again, don't linger.
The CASH Tab
Okay, on to the third tab: Cash.
Once again, very few entries. The 3-in-1 Calculator brings over the appropriate numbers from your P&L and buying plan. Automatically. And accurately. Nice, huh?
Now, this IS the page to linger on. Scroll down to see the Ending Cash Balance for each month.
Now is when you start to play "what if...?"
That is, "How would cash flow be affected by changes I might make?"
Changes to the Profit & Loss plan
What if you change SALES assumptions? What about MARGINS?
Let's take another look at OPERATING EXPENSES.
Now look at the INVENTORY tab.
No worries; if you made changes to your planned sales or margins, the 3-in-1 Calculator automatically adjusted your buying plan.
Look at the bottom row on that tab. Any negative numbers on the Net Open-to-Buy row? That represents how overbought you are, or how much excess inventory you would have. Now that you know the amount can put a number on it, you are better able to decide the magnitude of the changes you must make.
Look again at the CASH tab. What else can we do to improve our cash flow?
See those two rows for entries on Dating. Can we get more dating or better terms from our vendors?
Or, should we go ahead and take on some loans? (Lots of those are being talked about and offered.) But, most loans will need to be repaid at some point; would we have the cash flow to make those payments when they start coming due? The 3-in-1 Cash Flow Calculator can help answer that.
Finally, when you see a plan that shows some promise, date it and print it out.
And of course, whenever your assumptions must change – and they will – do another plan. Entries go in quickly; the "what if...?" power is readily available.
Cause-effect, cause-effect, cause-effect.
The 3-in-1 Cash Flow Calculator is INTEGRATED. The impacts of changes you make in one area are recognized and shown immediately. All the number-crunching is done for you; all the formulas are correct, and are "baked in."
You immediately can see the impacts of any of your possible decisions, before any salaries have been cut or merchandise orders cancelled (or placed.)
You are free to focus on applying your own informed good judgment!
There IS a lot you can do besides worry!
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.
Questions about Entries?
Recap of Expense "Buckets" | PROFITS tab entries | INVENTORY tab entries | CASH tab entries
Now, time to play "What if...?" | Keep a Copy | For more detail, go to 3-in-1 Calculator USER Guides
Take a Test Drive!
Use these entries from a Sample Company. Quickly try it out for yourself.
Still Have Questions?
Talk with The ROI's Co-Founders. They are available for private, confidential web conferences. Free! Just go here to reserve your time.
Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"
MONTHS - Start with any month of a 12 month period.
Select your Start month from the drop-down menu. It will be displayed on all screens.
Estimated SALES - Enter @Retail, without sales tax.
Round all entries to the thousands. Examples: $42,385.22 becomes 42.4; $5,787.92 becomes 5.8; $385.33 becomes 0.4
GROSS MARGIN % - Enter estimated Gross Margin (Gross Profit) percent for each month of the 12 month period.
Enter maintained margin, after markdowns. Can be up to one decimal place (tenths of percent).
Examples: Enter 44, becomes 44.0%; enter 38.5, becomes 38.5%
EXPENSES - The Calculator needs just one entry for each expense "bucket".
Variable expenses are entered as a percent of sales. Use whole numbers to one decimal place
Examples: Enter 12.5, becomes 12.5%; enter 10, becomes 10%
Fixed expenses are a flat $ amount for each month. (Take totals for the year and divide by 12 to get an estimate of yours.) Round all $ entries to nearest thousand.
Examples: $8,673 becomes 8.7; $12,229 becomes 12.2
(See details in About "Expense Buckets" link.)
When projecting, it is easier to group expenses into 5 major categories, or "buckets".
Variable expenses are a percent of sales; the monthly dollar amount rises and falls as sales fluctuate.
Fixed expenses average essentially the same dollar amount each month.
(If you've not yet set up these categories on your P&L, use The ROI's SPEEDY Expense Analyzer.)
SELLING Expenses -
Examples: Store payroll, including taxes and benefits; Advertising; Bags & boxes; Special events; etc.
OCCUPANCY Expenses - Fixed expense, essentially flat $ amount each month
Examples: Rent; Utilities; Maintenance; Security; CAM charges; etc.
ADMINISTRATIVE Expenses - Fixed expense, essentially flat $ amount each month
Examples: Management salaries (Owner; General Manager; Buyer) including taxes and benefits; Support staff/services (bookkeeping; IT; warehouse; marketing); Interest on borrowed money; Professional services (legal, accounting); Training; Travel; All other expenses not included elsewhere.
TAXES - Federal, State, Local taxes not included elsewhere.
DEPRECIATION/AMORTIZATION - Fixed expense, essentially flat $ amount each month.
These are non-cash expenses, and must be kept separate in order to project the Cash Flow.
Open-to-Buy Plan Inputs
Beginning Inventory @Cost - Enter the approximate amount of total inventory on hand at the start of your 12 month planning period. Close counts! Round $ entries to nearest thousand
Targeted Inventory Turns - Choose your targeted inventory turnover rate from the dropdown menu.
The Key: Cash Flow
Current Inventory Payables - Estimate of your total Accounts Payable for inventory (only) purchases. Close counts! Round $ entry to nearest thousand.
Example: Enter $127,835 as 127.8
Long Term Loan Payments - Enter monthly payments (principal only) for any existing Long Term loans. Round $ entry to nearest thousand.
Cash on Hand - Estimate of cash available at beginning of the 12 month planning period you are using. Close counts! May also be a negative entry to reflect payments/checks waiting to clear. Round $ entry to nearest thousand.
AND THAT'S IT!
The INTEGRATED Calculator brings over (integrates) all other needed entries from your Profit Plan Inputs, Projected P&L, and Projected Open-to-Buy Plan.
Look at Your Projections; Adjust As Needed
Does your projected P&L show you will have a loss?
Does the cash flow projection show cash shortfalls ahead?
Try out some "What if...?" adjustments. Immediately see the effect!
CHANGE SALES and/or GROSS MARGINS?
On the Profits screen, change Sales in any month(s). Remember to adjust Gross Margins in those months as needed. Then, go to the Projected Cash Flow to see the effect.
On the Profits screen, adjust your planned expenses. Then, return to the Projected Cash Flow to see the effect.
CHANGE INVENTORY TURNS?
On the Inventory screen, enter a higher turnover rate. Then, go back to the Projected Cash Flow to see the effect.
GET DATING FROM VENDORS?
The Projected Cash Flow allows you to show the effect of Dating on your Cash Flow. Enter the $ amounts to be deferred in the appropriate month(s); ALSO enter the $ amounts due to be paid in the appropriate month(s). All entries are positive amounts; round all $ entries to nearest thousand.
The Projected Cash Flow includes inputs for Loans Received and Loan Repayments. (Note: Interest on the borrowed funds must be added into Administrative Expenses on the P&L inputs.)
CAUSE-EFFECT, CAUSE-EFFECT, CAUSE-EFFECT
Just add your judgment. The INTEGRATED "What if...?" Calculator does the number crunching for you.
Adjustments all in? Like what you see? Great!
Now, print it out: Your INTEGRATED Retail Financial Plan
You will get:
Projected PROFIT & LOSS STATEMENT
Monthly "big picture" operating budget for you.
And Projected INVENTORY BUYING PLAN (Open-to-Buy)
Based on your planned sales, margins, and targeted turnover rate, a monthly buying plan for your total operation. Each month's targeted ending inventory is a key number!
And Projected CASH FLOW
Fully integrated Cash Flow plan specifically for retailers: reflects the effect of inventory purchases, sales, margins and expenses on your cash flow.