Business Cash Flow Projection Calculator
Models operational, investing, and financing cash flows under IAS 7 principles across monthly, quarterly, and annual horizons to forecast bank balances and avoid insolvency.
Computational Framework & Statutory Formulas
Operating Cash Flow = Cash Collections from Customers - (Supplier Payments + Salaries + Taxes + Operating Expenses)
Net Cash Movement = Operating Cash Flow + Investing Cash Flow (Capex/Disposals) + Financing Cash Flow (Loans/Dividends)
Closing Cash Balance = Opening Cash + Net Cash Movement
Nigerian Economic & Statutory Context
Many profitable Nigerian companies fail due to cash starvation rather than lack of sales. High interest rates and unpredictable payment cycles make rigorous 12-month rolling cash flow forecasting mandatory for bank creditworthiness and audit compliance.
Frequently Asked Questions (FAQ)
Why can a business report strong accounting profit but suffer a cash flow crisis?
Under accrual accounting (IFRS), revenue is recognized when invoiced, not when cash is received. If substantial sales are made on credit (uncollected receivables) or cash is tied up in unsold stock and capital expenditure, a company can be profitable on paper while unable to meet immediate payroll or debt obligations.
How often should a Nigerian company update its cash flow forecast?
Chartered accountants recommend maintaining a 13-week rolling cash forecast updated weekly for operational control, supplemented by quarterly 12-to-24-month strategic financial projections for board and banking reviews.