3.3 Cash Flow Forecasts – Unit 3:
Investigating Financial Control
3.3 Cash Flow Forecasts
Unit 3: Investigating Financial Control
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Contents
For more detailed instructions, see the Getting Started presentation
Flash activity (these activities are not editable)
Teacher’s notes included in the Notes Page
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Key skills
Printable activity
Accompanying spreadsheet
Sound
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Creating a cash flow forecast
In this section you will learn how
to prepare a cash flow forecast.
Creating a cash flow forecast
Case study: Andy’s new car
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How to construct a basic cash flow forecast
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A basic cash flow forecast
January February March
April
May
June
Inflows
Sales revenue
Loans
Grants
Investors' capital
Total inflows
130,000
20,000
0
0
150,000
150,000
0
0
0
150,000
160,000
0
0
0
160,000
170,000
0
0
5,000
175,000
185,000
0
0
0
185,000
195,000
0
0
0
195,000
Outflows
Stock
Wages
Rent
Utility bills
Interest on loans
Taxes
Advertising
Total outflows
30,000
100,000
4,000
1,000
2,000
1,000
11,000
149,000
30,000
110,000
4,000
1,000
2,000
1,000
12,000
160,000
25,000
110,000
4,000
1,000
2,000
1,000
12,000
155,000
30,000
110,000
4,000
1,000
2,000
1,000
15,000
163,000
30,000
110,000
4,000
1,000
2,000
1,000
12,000
160,000
30,000
115,000
4,000
1,000
2,000
1,000
14,000
167,000
20,000
1,000
21,000
21,000
-10,000
11,000
11,000
5,000
16,000
16,000
12,000
28,000
28,000
25,000
53,000
53,000
28,000
81,000
Monthly summary
Opening bank balance
Net cashflow
Closing bank balance
What do you notice about the inflows in April?
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Complete a basic cash flow forecast
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Case study: Andy’s new car
Andy Harris wants to buy a new car to take to
university in September. He knows that:
A good second-hand car will cost him £2500.
His Dad has agreed to give him £1500 at the end of
August as a birthday present to help him buy the car.
At the start of March, he had £450
in his bank account.
He earns £150 a month working for his uncle.
Andy is going to try and cut down on his spending.
He estimates that he will spend £30 a month on
clothes, magazines and music, and £25 a month
socializing with his friends.
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Assignment: Andy’s new car – a cash flow
forecast
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Case study: Andy’s new car
This is what actually happened to Andy:
He spent £40 shopping in May and August.
He worked a few extra hours in June and earned £175.
He spent £80 going to a music festival in April.
He only earned £100 in March.
Use the spreadsheet
activity on the next slide
to edit Andy’s original
cash flow forecast and
decide whether he can
still afford his car.
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Andy’s new car – revised cash flow forecast
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Assignment: Andy’s yearly cash flow
forecast
Andy’s yearly cash flow forecast
Andy decides to save over a whole year in order to go
travelling. He begins saving in September and plans to travel
in October of the following year.
Use the information you already know about Andy’s inflows
and outflows over a six month period to think about what he
is likely to earn and spend over a whole year.
Set up an Excel spreadsheet to create a cash
flow forecast for Andy over twelve months.
In groups, discuss what you think Andy
could do to improve his cash flow.
Present your ideas through a short
talk or by designing a poster.
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Beat the boss!
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Glossary
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