Cash Growth Calculator
Cash Growth CalculatorThe Cash Growth Calculator has been developed and included here so you can quickly calculate your business’ positive or negative cash flow position. It is important to know if your business is in a cash flow negative positive as this dramatically impacts your business ability to grow and fund new sales. If your net variable cashflow is negative If your Net Variable Cashflow is negative then when you sell your product / service, you have to fund a portion of each sale every time you make a sale. For example, if your negative cash flow is 10% of your gross revenue, then every time you make a sale, $0.10 (ten cents) of every $1.00 must be found to fund that sale. A lot of business owners fund that through not paying their creditors (accounts receivable) or have a line of credit with the bank or have an overdraft or they simply don’t pay themselves as they try to grow their business or they eventually run out of cash and go bust! Remember that you can have a profitable business but run out of cash ... eventually having to close your doors. The Cash Growth Calculator is your tool to overcome any shortage of cash flow. If you are in a negative cash flow position then you either need to change your situation immediately or restrict your growth and / or find a pool of money so you can continue to operate. If your net variable cashflow is positive If your Net Variable Cashflow is positive then every time you make a sale you have excess cash deposited into your bank account. For example, if your positive cash flow is 10% of your gross revenue then every time you make a sale, $0.10 (ten cents) of every $1.00 will generate you a positive $0.10 (ten cents) of cash. This situation is great as the more your sell the more cash you gain. |
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