Labor resources are the part of the working age population that has...
None of the types of financial plans of an enterprise, nor any of its major operations can be developed without connection with the planned cash flows for them. Forecasting cash flows is closely related to both strategic planning for the future development of the company and the implementation of long-term financial planning.
The concentration of all types of planned cash flows of enterprises is reflected in a special planning document - a plan for the receipt and expenditure of planned funds, which is one of the main forms of the current financial plan.
A plan for the receipt and expenditure of funds is developed for the coming year on a monthly basis in order to ensure that seasonal fluctuations in the enterprise’s cash flows are taken into account. It is compiled for individual types of economic activity and for the enterprise as a whole. Considering that a number of the initial prerequisites for the development of this plan are poorly predictable, it is usually drawn up in options - “optimistic”, “realistic” and “pessimistic”. In addition, the development of this plan is multivariate in nature and in terms of the methods used to calculate its individual indicators.
Cash flow forecast allows you to identify periods when the company requires additional financing. The management of the enterprise, using the cash flow forecast, decides what additional financing should be received and in what time frame and how the return of funds will be carried out.
The main goal of developing a plan for the receipt and expenditure of funds is to forecast over time the gross and net cash flows of an enterprise in the context of individual types of its economic activities, determine possible sources of receipt and expenditure of funds and ensure constant solvency at all stages of the planning period.
Because Since most indicators are quite difficult to predict with great accuracy, cash flow planning comes down to drawing up a cash budget in the forecast period, taking into account only the most important flow parameters: sales volume, share of proceeds from cash sales, forecast of accounts payable, etc.
In general, the cash flow forecasting technique includes the following operations:
1) forecasting cash receipts for the period;
2) forecasting cash outflow;
3) calculation of net cash flow (excess or lack of funds);
4) calculation of the total need for short-term financing.
At the same time, the plan for the receipt and expenditure of funds is developed at the enterprise in more detail in the context of types of economic activities, for individual divisions and includes the following procedures.
At the first stage, the receipt and expenditure of funds from the operating activities of the enterprise is predicted, since a number of performance indicators of this plan serve as the initial prerequisite for the development of its other components.
At the second stage, planned indicators for the receipt and expenditure of funds for the investment activities of the enterprise are developed (taking into account the net cash flow for its operating activities).
At the third stage, the planned indicators for the receipt and expenditure of funds for the financial activities of the enterprise are calculated, which is designed to provide sources of external financing for its operating and investment activities in the coming period.
At the fourth stage, gross and net financial (cash) flows are predicted, as well as the dynamics of cash balances for the enterprise as a whole.
Some complexity at the first stage may arise if the company uses a methodology for calculating revenue as products are shipped. The key source of cash receipts is revenue from the sale of goods, which is divided into cash and credit receipts, i.e. non-cash. In practice, from the moment the goods are shipped until the money arrives in the company’s account, a certain time passes. Therefore, the company is forced to take into account the average period of time that customers need to pay for goods. Based on this, it is determined what share of revenue for sold products will come in a given period and what in the next.
Operational activities are carried out in two main ways:
Based on the planned volume of product sales;
Based on the target net profit amount.
When forecasting using the 1st method calculation of individual plan indicators is carried out in the following sequence:
1. Determined planned volume of product sales based on the production plan, which makes it possible to link the planned sales volume with the resource potential of the enterprise and the level of its use, as well as the capacity of the corresponding product market.
OR p – planned volume of product sales
ZGP n – the amount of finished goods inventories at the beginning of the period
PTP - the total volume of production of finished marketable products in the period under review
ZGP k – the amount of finished goods inventories at the end of the period
The planned volume of product sales is differentiated in terms of sales in cash and with the provision of trade credit.
2. Calculated planned receivables collection ratio based on its actual level in the reporting period, taking into account planned measures to change the policy of providing trade credit.
where DZ and – collected (received) receivables
DZ – total amount of receivables
3. Calculated planned amount of cash receipts from product sales .
where is the planned volume of product sales for cash
– planned volume of product sales on credit
– the amount of the previously uncollected balance of receivables (subject to collection in the planning period)
This indicator characterizes the planned volume of positive cash flow from operating activities.
The volume of cash receipts and changes in accounts receivable can be determined using the balance sheet method (chain method). The general balance equation has the form :
VR + DZ np = DP + DZ kp
where VR is revenue from product sales for the period
DP – cash receipts in a given period
DZ np, kp – accounts receivable for goods and services, respectively, at the beginning and at the end of the period.
A more detailed calculation involves classifying accounts receivable according to their maturity dates. Such a classification can be made by accumulating statistical data from the analysis of the actual repayment of receivables for previous quarters. Thus, it is possible to establish the average share of debtors with a repayment period of up to 30 days, up to 60 days, and 90 days. etc.
4. Determined planned amount of operating costs for production and sales of products, based on the calculation of the cost of individual types of products (production and complete). The planned cost of a specific type of product includes all direct and indirect costs of its production and sales.
In the most general form, the planned amount of total operating costs of an enterprise can be presented:
The planned amount of direct costs for the production of 1 unit of product
The planned amount of overhead costs for the production of 1 unit of product
Planned production volume of specific types of products in physical terms
Planned cost of selling 1 unit of product
Planned volume of sales of specific types of products in physical terms
The planned amount of general business expenses of the enterprise
5. Calculated planned amount of tax payments , paid from income and included in the price of products based on the planned volume of sales of certain types of products and the corresponding rates of value added tax, excise taxes and other taxes
Consolidated income tax rate
6. Calculated planned amount of gross output for operating activities
7. Calculated planned amount of taxes paid from profits
Income tax rate, %
The amount of other taxes and fees paid from profits
8. Calculated planned amount of net profit for operating activities
9. Calculated planned amount of cash spent on operating activities
Planned amount of depreciation charges for fixed assets and intangible assets
This indicator (RDS p) characterizes the planned volume of negative cash flow from operating activities.
10. Calculated planned amount of net cash flow
or
When forecasting the volume of cash receipts and expenditures using the 2nd method(based on the planned target amount of profit) the calculation of individual indicators is more complex compared to the 1st method.
Target net profit (NP)– the planned need for financial resources generated from this source, ensuring the implementation of the enterprise’s development goals in the future.
The calculation of the target amount of net profit is carried out in the context of individual elements of the upcoming need:
1. Capitalized part of net profit:
· increase in production fixed assets
· increase in intangible assets
· increase in own current assets
· increase in the volume of the portfolio of long-term financial investments
· contributions to the reserve fund
2. Consumed part of net profit:
· payment of income to the owners of the enterprise
· budget for employee participation in profits
· budget of the internal social program
· external social program budget
The calculated value of the planned target amount of the state of emergency allows you to determine a number of important indicators:
Target gross profit amount:
Target net profit amount
Consolidated rate of income tax and other taxes paid from profits, expressed as a decimal fraction
where 
Planned amount of operating costs for production and sales of products
Actual amount of fixed operating costs in the previous period
Actual amount of variable operating costs in the previous period
Target net gross profit amount (gross profit less VAT and excise taxes)
Actual amount of gross profit in the previous period
As part of planned cost operations, depreciation amounts are reflected as a separate item.
Planned amount of cash receipts from product sales
Consolidated rate of value added tax and other taxes and fees paid from income (decimal fraction)
Planned amount of tax payments, paid from income:
Planned amount of cash spent on operating activities
Planned amount of net cash flow
or
Stage
Forecasting cash receipts and expenditures on investment activities carried out using the direct counting method. The basis for these calculations is:
real investment program , characterizing the volume of investment of funds in the context of individual investment projects being implemented or planned for implementation;
· a portfolio of long-term financial investments designed for formation. If such a portfolio has already been formed, then the required amount of funds to ensure its growth or the volume of sales of long-term financial investment instruments is determined;
· the estimated amount of income from the sale of fixed assets and intangible assets. This calculation should be based on a plan for their renewal;
· predicted amount of investment profit. Since the profit from completed real investment projects that enter the operational stage is shown as part of operating profit, this section predicts the amount of profit only for long-term financial instruments - dividends and interest receivable.
Stage
Forecasting cash receipts and expenditures on financial activities carried out using the direct counting method based on the need for external financing, determined by its individual elements:
1) the planned volume of additional issue of own shares or attraction of additional share capital in that part that can be realized in a specific upcoming period;
2) the planned volume of attracted long- and short-term financial credits and loans in all its forms;
3) the amount of expected receipt of funds in the form of gratuitous targeted financing;
4) the amount of the principal debt for long- and short-term financial loans and borrowings envisaged for payment in the planning period (based on the loan agreement).
5) the expected volume of dividend payments to shareholders (interest on share capital). This calculation is based on the planned amount of the emergency and the dividend policy implemented by it.
At the last stage, by comparing projected cash receipts and payments, the net cash flow (positive or negative) is determined and the total need for short-term financing (bank credit) is established.
Let's consider the methodology for forecasting cash flows using the following example:
It is known that the company sells 80% of its products on credit, i.e. for non-cash payment, and the remaining 20% - for cash payment. The company provides its customers with a 30-day credit, i.e. Payment for goods is made within 30 days. According to statistics, 70% of these payments are made on time, i.e. within a month, and the remaining 30% is paid over the next month.
It is expected that the sales volume for the 1st quarter of this year will be: January - 105 thousand rubles, February - 111 thousand rubles, March - 126 thousand rubles. Sales volume in November was 90 thousand, in December – 96 thousand.
It is also planned to receive 8.7 thousand in January from the sale of securities, 4.2 thousand in February from the liquidation of written-off household inventory and 17.4 thousand in March from the sale of a car.
It is planned that payments will amount to: in January - 85 thousand to repay the loan, 3.8 thousand to repay the debts of suppliers and 11.4 thousand for wages and taxes; in February – 103.5 thousand for the supply of raw materials and 12.6 thousand for wages and taxes; in March - 50 thousand to repay the loan, 68.5 thousand to pay for purchased inventory and 17.4 thousand for wages and taxes.
It is known that accounts receivable at the end of December amounted to 45 thousand rubles, and the cash balance was 6.0 thousand. The required minimum cash in the current account is 9 thousand rubles. It is necessary to draw up a cash budget for the 1st quarter of the current year.
1. The calculation begins by assessing the dynamics of cash receipts and accounts receivable in the following table.
Table 9.3 - Dynamics of cash receipts and receivables
| Indicators, thousand rubles | January | February | March |
| 1. Accounts receivable at the beginning of the period | 53,64 | 60,6 | |
| 2. Sales revenue, total, incl. sale on credit | 105,0 105*0,8=84,0 | 111,0 111,0*0,8=88,8 | 126,0 126,0*0,8=100,8 |
| 3. Receipt of funds, total, incl. | 21+53,76+21,6 = = 96,36 105*0,2=21 96*0,8*0,7=53,76 90*0,8*0,3=21,6 | 22,2+58,8+23,04 = 104,04 111*0,2=22,2 84*0,7=58,8 96*0,8*0,3=23,04 | 25,2+62,16+25,2 = 112,56 126*0,2=25,2 88,8*0,7=62,16 84*0,3=25,2 |
| - 20% of sales of the current month in cash - 70% of sales on credit of last month - 30% of sales on credit of the month before last | 45+105-96,36 = = 53,64 | 53,64+111-104,04 = 60,6 | 60,6+126-112,56 = 74,04 |
4. Accounts receivable at the end of the period - from the balance sheet equation (DZ kp = DZ np + BP - DP)
Table 9.4 - Projected cash budget
3. Finally, the amount of additional short-term financing is determined.
| Indicators, thousand rubles | January | February | March |
| Table 9.5 - Calculation of the need for external financing. | 6,0 | 10,8 | 3,0 |
| 1. Cash balance at the beginning of the period | 4,8 | -7,8 | -6,0 |
| 2. Change in cash for the period | 10,8 | 3,0 | -3,0 |
| 3. Cash balance at the end of the period | 9,0 | 9,0 | 9,0 |
| 3. Required minimum funds on account | - | 6,0 | 12,0 |
4. Need for a short-term bank loan
The resulting budget allows the management of the enterprise to make timely decisions regarding additional attraction of funds to maintain its solvency.
Questions for self-control:
1. What is meant by forecasting?
2. What types of forecast developments do you know? Give them a description.
3. Explain the essence of the main forecasting methods.
4. Based on what criteria is the quality of the received forecast information assessed?
5. What stages generally include statistical forecasting methods?
6. Name the main methods of statistical forecasting.
7. What is “seasonal variation”? What indicators are they characterized by?
8. Define elasticity. By what indicator is it assessed?
9. What is the purpose of cash flow planning?
10. Name the stages of drawing up a plan for the receipt and expenditure of funds at the enterprise.
11. Describe the methodology for drawing up a plan for the receipt and expenditure of funds for operating activities.
12. For what purpose are the financial (cash) flows of an enterprise forecasted?
13. What is the essence of the cash flow forecasting technique? Describe the main stages of forecasting.
Test tasks:
1. Scientific activity aimed at identifying and studying possible alternatives for future development and the structure of its probable trajectories is called:
1. analysis
2. forecasting
3. analytical alignment
4. verification
5. modeling
2. Forecasts calculated for a period during which significant qualitative and quantitative changes in the state or development trends of the forecast object are not expected are called:
1. short-term
2. long-term
3. medium term
4. current
3. A forecast that indicates a single value of the predicted indicator is called:
1. point
2. interval
3. high quality
4. single
5. current
4. Which forecasting method is based on the assumption of a proportional dependence of balance sheet and profit and loss account items on sales volume:
1. method of historical analogies
2. method of constructing a decision tree
3. percentage of sales method
4. method of expert assessments
5. trend extrapolation method
5. The measure of uncertainty in the behavior of a forecast object over time is called:
1. reliability of the forecast
2. quality of forecast
3. reliability of the forecast
4. forecast error
5. forecast accuracy
6. Fill in the missing words:
The forecasting method based on the percentage change in sales is based on the assumption that a) the value of most items... and... change... in proportion to the volume of sales and b) the levels of proportionally changing items that have developed in the enterprise and the relationships between them...
4. determining the type of trend
5. determination of the lower and upper limits of the forecast
6. point forecast using the trend equation
7. Determination of the standard error of the model
10. The measure of the response of one quantity to a change in another is called:
1. deterministic connection
2. correlation
3. regression
4. functional dependence
5. elasticity
11. The cash flow forecasting methodology does not include:
1. calculation of the total need for short-term financing
2. forecasting cash receipts
3. forecasting market conditions
4. forecasting cash outflow
5. Calculation of net cash flow
12. 
:
1. planned amount of operating costs for production of products
2. planned amount of cash receipts from product sales
3. planned amount of net cash flow
4. planned amount of net profit for operating activities
5. planned volume of product sales
13. Fill in the missing words:
Elasticity is a measure of... one quantity by... another.
14. Correlate the stages of cash flow planning with their content:
15. Finish the sentence: The planned volume of product sales is determined on the basis of ... (production plan).
16. Determine the sequence of planning net cash flow for operating activities:
1. calculation of the planned amount of cash receipts from product sales
2. calculation of the planned amount of tax payments
3. calculation of the amount of net profit from operating activities
4. calculation of the planned amount of net cash flow
5. calculation of the planned amount of cash expenses for operating activities
6. determination of the planned volume of product sales
7. calculation of the planned amount of gross profit from operating activities
8. calculation of the planned amount of operating costs for production and sales of products
9. calculation of the amount of taxes paid from profits
10. calculation of the planned collection ratio of receivables
17. Finish the sentence:
Fluctuations that have a definite and constant period equal to the annual interval in statistics are called....
Planning (forecasting) cash flows of an organization
Cash flow planning covers three main types:
Strategic planning, during which the cash flow forecast is formalized in the form of cash receipts and expenditures by year of the planning period and by type of activity;
Tactical planning, during which a plan for the receipt and expenditure of funds is developed;
Operational planning, during which a payment calendar is developed.
Cash flow forecast is a financial document that has become widespread in recent years. It reflects the movement of cash flows from current, investing and financing activities. Separating the areas of activity when developing a forecast allows you to increase the effectiveness of cash flow management and helps the financial manager in assessing the use of funds and determining their sources. In addition to examining accounting information, forecast data allows one to estimate future flows, and therefore the organization's growth prospects and its future financial needs.
Investment financing is included in the forecast after a thorough feasibility study and analysis of production and financial investments. When planning long-term investments and sources of their financing, future cash flows are considered from the perspective of the time value of money based on discounting methods to obtain comparable results.
Using a cash flow forecast, you can estimate how much cash needs to be invested in the organization’s economic activities, the synchronicity of cash receipts and expenditures, and therefore check the future liquidity of the organization.
After drawing up this forecast, the organization’s financing strategy is determined, the essence of which is as follows:
identifying sources of long-term financing;
formation of the structure and costs of capital;
choosing ways to increase long-term capital;
Tactical financial planning is considered as an integral part of the strategic plan and represents a specification of its indicators. The main task of this plan is to check the reality of the sources of funds (inflows) and the justification of expenses (outflows), the synchronicity of their occurrence, and determine the possible need for borrowed funds. This is a document that allows you to realistically assess how much money an organization will need and in what period.
The medium-term plan is developed for the year, broken down by quarters and divisions. The tactical plan corresponds in form to the strategic plan and serves as its development and detail.
It should be noted that if, as a result of the development of a medium-term plan, there is a shortage of funds, the following measures should be taken: find additional sources of financing (additional issue of shares and bonds, attraction of long-term loans, targeted financing); reduce the organization’s expenses, in particular, sell financial investment instruments and abandon financial investments; accelerate the sale of unused fixed assets (rent them out); reduce the volume of real investment.
If, as a result of developing a plan, there is excess cash flow, it is advisable to do the following: accelerate the start of implementation of real investment projects; more actively form a portfolio of financial investments; repay long-term bank loans ahead of schedule; expand the organization's operations.
The particular importance of synchronizing cash flows involves the development of not only an annual plan, but also a short-term plan for short periods of time (month, decade), which is called a payment calendar.
The payment calendar is a plan (budget) for organizing production and financial activities, in which all sources of cash receipts and expenses for a certain period of time are calendar-related. It completely covers the organization’s cash flow; makes it possible to link cash receipts and payments in cash and non-cash forms; allows you to ensure constant solvency and liquidity.
The payment calendar is compiled by the financial service; Planned indicators of the cash flow budget are concentrated and divided into months and smaller periods (15 days, ten days). The terms are determined based on the frequency of the organization’s main payments. In order for the payment calendar to be real, it is necessary to monitor the progress of production and sales, the state of inventories and accounts receivable.
In the process of compiling a payment calendar, the following tasks are solved:
organization of accounting for the temporary connection of cash receipts and upcoming expenses of the organization;
formation of an information base on the movement of cash inflows and outflows;
daily accounting of changes in the information base;
analysis of non-payments and organization of control measures to eliminate their causes;
calculation of the need for short-term financing in the event of a temporary discrepancy between cash receipts and liabilities and prompt acquisition of borrowed funds;
calculation (by amounts and terms) of the organization’s temporarily available funds;
analysis of the financial market from the perspective of the most reliable and profitable placement of temporarily free funds.
The payment calendar is compiled on the basis of a real information base about the organization’s cash flows. The constituent elements of the cash flow information base are documentary sources of information, the amount and timing of payments and receipts of funds. Documentary sources are: agreements with counterparties, banks; acts of reconciliation of calculations; acts of acceptance of products (works, services); invoices for payment; customs declarations; money orders; price agreement documents; salary payment schedules; status of settlements with debtors and creditors; legally established payment terms for financial obligations.
Each type of payment and receipt of funds has a specific information sign (term and amount) and documentary sources that reflect these signs. It is advisable to receive information daily: about the cash balances in each bank account, about the funds spent and the average balances per day, about the status of the marketable securities of this organization. It is also necessary to have information about planned receipts and payments for the coming period. All this information is essential if an organization wants to manage cash flow effectively.
Since drawing up a payment calendar is a rather labor-intensive procedure, the organization should carry out the necessary preparatory measures in advance.
You should start by developing a payment register. This involves defining a register of planned payments; the name of the budget item within which the payment will be made; source of payment (from which current account the money is planned to be paid according to the application); authorization (additional sign reflecting the status of the application: whether it is approved or not); the fact of execution of the application (a note indicating whether the application has been paid or not, as well as the date of payment).
Then rules for collecting and processing applications should be established. It will not be possible to create a somewhat reliable calendar for the coming week if the organization does not have payment regulations. It determines the rules for filling out applications, the approval procedure, and the deadlines. in which the application can be submitted, and the time when it will be executed. The rules for making payments are approved by order of the head of the organization and brought to the attention of all employees.
The next stage of creating a calendar is planning the receipt of payments to the organization. The most difficult thing here is to plan the amount of incoming funds per day on the calendar. Most often they act as follows. Receipts planned in the cash flow budget are divided by the number of working days in the month and the resulting figure is entered into the calendar as the incoming cash flow of one day.
Then you need to decide on your priorities if you don't have the money to pay all your bills. Today, for many organizations, it is quite typical that the available funds are not enough to pay for all agreed requests. Therefore, each application must indicate the priority of payment and the payment deadline under the contract. Having this data, the financial director will be able to independently make decisions on postponing certain payments to a later date.
And lastly: it is necessary to monitor the implementation of the adopted calendar.
Once the calendar has been compiled, all that remains is to update it. As a rule, this is done at the end of the day based on the statement. Instead of planned data, information about actual payments made, receipts and, most importantly, balances is entered into the calendar.
Chapter Conclusion
The main and main goal of a financial manager is to increase the level of wealth of the owners of the organization. As a rule, the wealth of owners can be assessed by the profit generated by the organization's activities. However, it is important to remember that profit is the expected financial result of an organization's activities. Real receipts and payments, as a rule, do not coincide in time (and sometimes in value) with income and expenses. Consequently, net cash flow and profit will not match. But it is the net cash flow that shows how much money the owner of the organization will actually have
cash flow forecasting; d) determining the optimal level monetary funds Working capital management involves managing them both in the sphere of production and circulation. When managing working capital (production sector), it is necessary to pay attention to the state of affairs at the enterprise in the following areas: dynamics of consumption of material and fuel and energy resources
cash flow forecasting without adjustment for inflation, accordingly the inflation premium is excluded from the price of capital. This method is simple, but to use it it is necessary that inflation affects everything equally cash flows and depreciation and that the inflation adjustment included in the return on equity ratio matches the rate of inflation. In practice, these assumptions are not
cash flows and making decisions on effective investment at various levels involves a time assessment of money. Methodological aspects of financial and economic calculations are set out in the works of E.M. Chetyrkin (3,4), V.V. Kovalev, E.S. Stoyanova (1, 2) and other authors on financial management. Cash in financial settlements and commercial transactions, regardless of their nature.
cash flow forecasting from reversion: - assignment of a future sales price based on assumptions about changes in the value of the object during the period of ownership, changes during this period in the state of the real estate market in general and the market for similar objects in particular, resale - capitalization of income for the year following the year of completion of the investment project: V = DATSFn Vn = Ro, where Vn are receipts from
cash flow forecasting from the project over the entire expected tenure, including income from resale at the end of this period; determining the opportunity cost of capital in the financial market; determination of current value cash flows from the project by discounting at a rate corresponding to the opportunity cost of capital and subtracting the amount of the initial investment; choice
In particular, you can calculate the total amount of interest payments, the amount of interest payment in the kth period, the share of the loan repaid in the first k years, etc.
in the coming period. Overall increase monetary funds does not always mean an improvement in the financial condition of the corporation: it all depends on what types of activities were and will be aimed at in the future monetary funds that provide an increase or decrease in the total volume of financial resources. If the results of operations for the reporting period are unprofitable, then the estimated
financial forecasting receipts for the period; churn planning monetary funds; calculation of net monetary flow a(excess or deficiency monetary s funds); calculation of the total need for short-term financing. A certain difficulty at the first stage may arise if the company uses the method of calculating sales revenue as products are shipped. Main source
cash flows is closely related to both the strategic development of the enterprise (corporation) and current financial planning (for the quarter, year). Forecast cash flows includes calculation of possible sources of income and directions of expenditure monetary funds. This forecast is carried out in several stages: calculation monetary receipts for the period; determination of possible outflow (payments)
cash flow forecasting, arising in current, investment and financial activities. The financial plan is interconnected with plans for production and sales of products, purchases of material resources, investments, marketing, research and development, etc. The objectives of financial planning are as follows: the use of economic, legal, accounting and market information for
cash flows. Tax
forecasting income by year, it is necessary, if possible, to take into account all types of income, both production and non-production, that may be associated with a given project. So, if at the end of the project implementation period it is planned to receive funds in the form of the liquidation value of equipment or the release of part of working capital, they must be taken into account
cash flow forecasting and has the following structure. Chapter monetary receipts, which include: cash balance at the beginning of the period; monetary proceeds from product sales; other monetary receipts. Payment section - everything monetary payments in the forecast period, Section of surplus or deficit monetary funds - the difference between monetary receipts and payments. Financial section, in
cash flows. Modified internal rate of return. Comparative analysis of projects of different durations. Analysis of investment projects in conditions of inflation. Analysis of investment projects under risk conditions. Capital investment budget formation and optimization. Topic 9. Working capital management of the company Composition, structure and purpose of working capital. Management Models
cash flow forecasting. In particular, you can calculate the total amount of interest payments, the amount of interest payment in the k-th period, the share of the loan repaid in the first k years, and
forecasting When assessing Russian enterprises, the forecast period is usually set at three years. During this period, the expert appraiser quite accurately predicts the dynamics cash flows. Accurately predict dynamics cash flows for several decades is not possible, therefore the period of further existence of the enterprise is called the post-forecast period, when
cash flow forecasting the company needs an analysis of expenses, investments and revenues. When forecasting revenue, the structure of commercial products (works, services), production volume and prices, retrospective revenue growth rates, demand for products, production capacity, economic situation in the country and industry, competition in the field of activity and in the regional segment, and the share of the enterprise are taken into account
cash flow forecasting from the proceeds from the sale of products, works, services, the following methods can be used: a) extrapolation b) industry statistics (growth rates) c) planning (management plans) d) all answers are correct For forecasting fixed costs can be used: a) analysis of a fixed level of fixed costs b) net asset method c) Saaty method d) Fulmer model
forecasting the amount of annual net income. In practice the following methods are used forecasting net income: simple average method; weighted average method; extrapolation method. These methods are most often used by appraisers because of their simplicity and sufficient accuracy. The first two methods are used if, as a result of the analysis of net income for the period
forecasting, Federal social programs are being developed and approved. The functions of the federal level of government also include the establishment of such social standards as the minimum wage, minimum pensions, subsistence level, and the development of basic methods of social support for the population groups most in need. At the federal level, funds are allocated for
Forecasting in financial management is the anticipation of a certain event, the development of future changes in the financial condition of the object as a whole and its various parts.
A feature of forecasting is the alternativeness in the construction of financial indicators and parameters, which determines the variation in the development of the financial condition of the enterprise based on emerging trends. Working on the forecast contributes to a deeper study of all aspects of production, which makes it possible to more successfully resolve emerging issues.
Forecasting can be carried out both on the basis of extrapolation of the past to the future, taking into account an expert assessment of the trend of change, and direct anticipation of changes.
A cash flow forecast is a report that reflects all receipts and expenditures of funds in the process of expected transactions (operations) for a certain period.
Cash flow forecasting allows you to foresee a shortage or surplus of funds even before they arise and makes it possible to adjust the behavior of the company over a certain period of time.
In the economic literature you can find the statement that the “forecast” of cash flow is more correctly called “budget”. However, according to a number of economists, such a statement is erroneous. They believe that the forecast and the budget are different, not similar concepts.
During the year, unforeseen circumstances may arise that require an immediate change in planned indicators to meet current circumstances. The new figures obtained cannot be called a “budget”.
It is more correct to call them “forecasts”, of which there can be as many as required depending on the circumstances.
Thus, for economists who adhere to this point of view, a cash flow forecast is a report that reflects all receipts and expenditures of funds in the process of expected transactions (operations) for a certain period, and the budget is the estimated results of a coordinated management plan or business strategy for the future period.
According to a number of other economists, since most indicators are quite difficult to predict with great accuracy, cash flow forecasting often comes down to constructing cash budgets.
Cash budget is a forecast of cash flows caused by collections and disbursements.
It is developed on the basis of planning future cash receipts and payments of the enterprise for various periods of time and shows the moment and volume of expected receipts and payments of cash for the reporting period.
The budget represents a program of actions expressed in monetary terms in the field of production, procurement of raw materials or goods, and sales of manufactured products. The action program must ensure temporal and functional coordination (coordination) of individual activities.
A cash budget can be drawn up for almost any period.
Short-term forecasts are typically made monthly, probably because they take into account seasonal variations in cash flows. When cash flows are predictable but highly variable, it may be necessary to develop a budget over shorter periods to determine maximum cash requirements. For the same reason, when cash flows are relatively weak, budgeting for a quarter or even a longer period of time may be justified.
The more distant the period for which the forecast is made, the less accurate the prediction becomes. The expense of preparing a monthly cash budget is usually justified only for forecasts related to the near future. A budget is only as useful as we rely on the accuracy of the forecast to create it.
The cash budget usually consists of four main sections: the receipts section, which includes the cash balance at the beginning of the period, cash receipts from customers and other cash receipts; section of cash expenses, reflecting all types of cash outflows for the coming period; division of cash surplus or deficit - the difference between the receipt and expenditure of funds; financial section, which presents in detail the items of borrowed funds and debt repayment for the upcoming period.
The budget allows:
- - get an idea of the total need for funds;
- - make decisions on the rational use of resources;
- - analyze significant deviations from budget items and assess their impact on the financial performance of the enterprise;
- - determine the need for the volume and timing of borrowing;
- - monitor changes in the amount of cash flow, which should always be at a level sufficient to repay obligations as needed.
As a result, it is possible to control the inflow and outflow of funds, paying special attention to the correctness of the reflection of the exact time of their occurrence and their relationship with the planned production, investment and financial activities.
Having examined various approaches to cash flow forecasting, the author proceeds from the point of view that forecasting comes down to building a cash budget. Forecasting will help to identify trends in the development of the entire enterprise as a whole, as well as individual indicators of its functioning. With the help of forecast data, an enterprise will be able to react in advance to upcoming changes in its condition, and not react quickly when, in the event of unfavorable development trends, it is no longer necessary to avoid losses (losses), but to try to reduce them.
From the point of view of statistical methods for processing such information, the forecast method is called the “trend method”. The linear trend equation has the form:
cash flow management liquidity
where ao and a1 are the parameters of the equation; t - time designation.
To calculate the function parameters based on the requirements of the least squares method, a system of normal equations is compiled:
n*ao + a1*(t)= Yao*(t) + a1*(t2) =(t*Y)
To solve a system of equations, the method of determinants is usually used, which allows one to obtain more accurate results by minimizing errors due to rounding in parameter calculations:
In relation to the analyzed data, a matrix of calculated indicators is compiled to determine ao and a1.
Thus, forecasting helps to see what will happen in the future with cash flow; whether it is necessary to withdraw funds in the first months or whether they need to be accumulated, which must be done in the second quarter.
It is also important whether the enterprise can use bank loans and loans from other enterprises. The cash budget will help us assess whether the repayment period for loans and borrowings is realistic.
In the context of the transition to market relations, control over cash flow becomes crucial, since the survival of the enterprise depends on it, therefore it is necessary to forecast cash flow, draw up and develop cash budgets. All this will allow you to monitor the amount of cash flow, identify shortages or surpluses of funds even before they arise and will make it possible to adjust the actions taken 11 Gritsenko G.A. The crisis in the global financial market and its impact on the Russian money market // Banking. - 2007..
graduate work
1.3 Cash flow forecasting methods
Results in any area of business depend on the availability and efficient use of financial resources, which are equated to the “circulatory system” that ensures the life of the enterprise. Therefore, taking care of finances is the starting point and the end result of the activities of any business entity. In a market economy, these issues are of paramount importance.
Forecasting is the anticipation of a certain event, the development of future changes in the financial condition of the object as a whole and its various parts. A feature of forecasting is the alternativeness in the construction of financial indicators and parameters, which determines the variation in the development of the financial condition of the enterprise based on emerging trends. Working on the forecast contributes to a deeper study of all aspects of production, which makes it possible to more successfully resolve emerging issues. Forecasting can be carried out both on the basis of extrapolation of the past into the future, taking into account expert assessment of trends, and direct anticipation of changes.
A cash flow forecast is a report that reflects all receipts and expenditures of funds in the process of expected transactions (operations) for a certain period.
Cash flow forecasting allows you to foresee a shortage or surplus of funds even before they arise and makes it possible to adjust the behavior of the company over a certain period of time. During the year, unforeseen circumstances may arise that require an immediate change in planned indicators to meet current circumstances. The new figures obtained are “forecasts”, of which there may be as many as required depending on the circumstances.
Thus, a cash flow forecast is a report that reflects all receipts and expenditures of funds in the process of expected transactions (operations) for a certain period, and a budget is the estimated results of a coordinated management plan or business strategy for a future period. According to a number of other economists, since most indicators are quite difficult to predict with great accuracy, cash flow forecasting often comes down to constructing cash budgets.
Cash budget is a forecast of cash flows caused by collections and disbursements. It is developed on the basis of planning future cash receipts and payments of the enterprise for various periods of time and shows the moment and volume of expected receipts and payments of cash for the reporting period. The budget represents a program of actions expressed in monetary terms in the field of production, procurement of raw materials or goods, sales of manufactured products, etc. The action program must ensure temporal and functional coordination (coordination) of individual activities. A cash budget can be drawn up for almost any period. Short-term forecasts are typically made monthly, probably because they take into account seasonal variations in cash flows. When cash flows are predictable but highly variable, it may be necessary to develop a budget over shorter periods to determine maximum cash requirements. For the same reason, when cash flows are relatively weak, budgeting for a quarter or even a longer period of time may be justified.
The more distant the period for which the forecast is made, the less accurate the prediction becomes. The expense of preparing a monthly cash budget is usually justified only for forecasts related to the near future. A budget is only as useful as we rely on the accuracy of the forecast to create it.
A cash budget usually consists of four main sections:
The receipts section, which includes the cash balance at the beginning of the period, cash receipts from customers and other cash receipts;
Section of cash expenditures, reflecting all types of cash outflows for the coming period;
Division of cash surplus or deficit - the difference between the receipt and expenditure of funds;
Financial section, which presents in detail the items of borrowed funds and debt repayment for the upcoming period.
The cash budget allows you to:
Get an idea of the total cash requirements;
Make decisions about the rational use of resources;
Analyze significant deviations in budget items and assess their impact on the financial performance of the enterprise;
Determine the need for the volume and timing of borrowing;
Monitor changes in cash flow, which should always be at a level sufficient to pay off obligations as needed.
As a result, it is possible to control the inflow and outflow of funds, paying special attention to the correctness of the reflection of the exact time of their occurrence and their relationship with the planned production, investment and financial activities. The forecasting methodology procedures are performed in the following sequence:
1) Forecasting cash receipts by subperiod;
2) Forecasting cash outflow by subperiods;
3) Calculation of net cash flow by subperiods;
4) Determination of the total need for short-term financing by subperiods.
The point of the first stage is to calculate the amount of possible cash receipts. A certain difficulty in such a calculation may arise if the company uses a methodology for determining revenue as goods are shipped. The main source of cash receipts is the sale of goods, which is divided into the sale of goods in cash and on credit. In practice, most businesses track the average time it takes customers to pay their bills. Based on this, you can calculate what part of the revenue for sold products will come in the same sub-period, and what part in the next. Next, using the balance sheet method, cash receipts and changes in accounts receivable are calculated in a chain manner.
The basic balance equation is:
D3 N + VR = DZ K + DP, (6)
where: D3 N - accounts receivable for goods and services at the beginning of the sub-period;
D3 K - accounts receivable for goods and services at the end of the sub-period;
VR - sales revenue for the sub-period;
DP - cash receipts in this sub-period.
A more accurate calculation involves classifying accounts receivable according to their maturity dates. This classification can be made by accumulating statistics and analyzing actual data on the repayment of receivables for previous periods. It is recommended to do the analysis by month. Thus, it is possible to establish the average share of receivables with a repayment period of up to 30 days, up to 60 days, up to 90 days, etc. If there are other significant sources of cash receipts (other sales, non-operating transactions), their forecast assessment is carried out using the direct method accounts; the amount received is added to the amount of cash receipts from sales for this sub-period.
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