Cash Flow Forecast - Do I show Inventory?

[Paul Harper]

Hello

I am attempting to put together a cash flow forecast as I would like to open a shop. I am applying for a loan through the governments Start up loans scheme.

What I would like to know, is if I need to show the value of forecasted inventory at beginning of each month, ( based on the previous months sales and purchases). And if so how and where? I would class inventory as an asset to be included in the business cash flow. but it seems to skew up my figures when inputted.

I am using the loan sites own template which is really handy, but I am a little confused if this needs to be part of the document.

Thanks.

 

[Scalloway]

You include payments for purchases in your cash flow. Inventory only appears on the Balance Sheet.

 

[Clinton]

Cash. Flow. The clue is in the name.

It's about cash coming in and cash going out.

That's it.

Don't confuse the issue by trying to show off how much inventory you've got or how much profit you made. Or even what sales you've made!

Just cash.

Disclaimer: Highly liquid assets can be treated as cash. For anyone bored enough to dig into that kind of small print there's IAS7. Go knock yourselves out.

 

[Mark T Jones]

Cash flow forecast is all about movement of cash - inventory is 'negative cash' - will have been accounted for at the time of purchase and will be realised at the time of sale - between tme there is no cash movement