¶ … money needed for this business including daily expenses and cost.
The sub-total for operation is $281,557.
The monthly break-even cost to sustain my business is $27, 657.
$281, 557 is spent on operations which includes:
Payroll, $177,600
Utilities, $6,000
Insurance, $6,000
Depreciation, $7,140
Rent, $24,000
Payroll taxes. $26,640
The remainder would be other expenses.
It is approximated that cash spending would total $177,600, whilst bill payment would be $103, 957.
The subtotal for all were I to include the following would be $322,957:
Long-term liabilities principal repayment $21, 600
Purchase other current assets = $19,800
Money flows in and out by my paying for a certain expense i.e. my cash flows out to another, but when I receive cash for a purchase that a consumer actualized cash flows into my business.
An example here would be rent where money to the total of 24,00 goes out to landlord. Money coming in for sales during Year 1 totaled $395,650.
One needs to keep the following questions in mind in order to understand cash flow-in and out of an organization:
1. How much cash does my business have?
2. How much cash does my business need to operate?
3. Where does my business receive its cash? Where does it spend its cash?
4. How do my income and expenses affect the amount of cash I need to expand my business?
Flow-out of cash goes to cover supplies, equipment, payroll and other needs that a business needs to cover in order to achieve its business purpose. Cash is needed for operating expenses, taxes, interest and principal to creditors, and dividends to stockholders. Flow-out of cash enables the business to be conducted. The amount of flow-in, however, determines whether the business can be sustained (i.e. whether there is a profit and a marked profit), and whether it is rational for flow-out to continue. Flow-in, too, determines the amount of flow-out for business to be sustained and to continue.
Reference
Blondin, N.S. Cash Flow-in and Out
http://www.tscpa.com/publicinfo/SBarticles/cash_flow_in_out.aspx
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