Cash flow statements – looking ahead
If you are with me up to here, and have produced your own estimates of revenues and costs, you have all the figures needed to produce your own cash flow projections. As you will already have spotted, there are two ways to do this.
You can extract the figures which involve exchanges of hard cash. This will generate a table similar to Fig. 16.1, although yours will be at a greater level of detail and have more rows.
Or you can take your forecast of net profit and reverse out the non-cash transactions.
The first method is so straightforward that I will leave it up to you. The second is slightly more complex, so I will cover it here. Essentially, go through your projected balance sheet and identify all the entries ...
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