Why use this calculator
Cash flow is the lifeblood of any business. Even profitable companies can fail if they run out of cash. This calculator helps you forecast your cash position over the next 12 months so you can plan ahead, avoid shortfalls, and make informed decisions about spending and investment.
How to use it
Enter your current cash balance, average monthly revenue and its expected growth rate, monthly operating expenses and their growth rate, and any planned one-time expenses with the month they will occur. The calculator projects your cash balance for each of the next 12 months.
The formula
Month N Revenue = Base Revenue x (1 + Growth Rate)^(N-1). Monthly Cash = Previous Cash + Revenue - Expenses - One-Time Costs.
Worked examples
Starting with $50,000, $30,000 monthly revenue growing 3%, $25,000 expenses growing 1%, $10,000 one-time expense in month 3
Ending cash of approximately $120,148 after 12 months with a lowest balance around month 3
Starting with $20,000, $15,000 monthly revenue growing 5%, $14,000 expenses growing 2%, $8,000 equipment purchase in month 1
Ending cash of approximately $31,420 with steady improvement after the initial expense
When people use it
- Planning for seasonal revenue fluctuations
- Evaluating timing of major purchases or investments
- Determining when to seek additional financing
- Setting cash reserve targets for your business
Tips
- Be conservative with revenue growth estimates - it is better to be pleasantly surprised than caught short on cash
- Include all fixed and variable expenses in your monthly expense figure
- Run multiple scenarios with different growth rates to stress-test your projections
- Maintain at least 3 months of expenses as a cash reserve
Questions people ask
- How accurate are 12-month cash flow projections?
- Projections become less accurate over time. The first 3 months are usually fairly reliable, while months 6-12 should be treated as directional estimates. Update your forecast monthly with actual figures for best results.
- What if my revenue is irregular or seasonal?
- Use your average monthly revenue as a starting point. For highly seasonal businesses, consider creating separate forecasts for each quarter with different growth assumptions.
- Should I include debt payments in expenses?
- Yes, include all cash outflows in your monthly expenses, including loan payments, credit card payments, and any other regular financial obligations.