A Projected Cash Flow Statement is a financial document that estimates the flow of cash in
and out of a business over a specific future period—typically monthly, quarterly, or annually. It
helps businesses anticipate cash shortages, plan for investments, and demonstrate financial
health to investors or lenders. Here's an overview and sample structure of a projected cash flow
statement:
Projected Cash Flow Statement (Template Overview)
Company Name: [Your Company Name]
Period Covered: [e.g., January 2025 – December 2025]
Currency: [e.g., USD, KES, etc.]
1. Cash Inflows
This section includes all sources of incoming cash during the period.
● Cash Sales
● Receivables Collected
● Loan Proceeds
● Investor Contributions
● Other Income (grants, subsidies, asset sales)
Total Cash Inflows
2. Cash Outflows
This section lists all expected cash payments.
● Operating Expenses:
○ Salaries and Wages
○ Rent
○ Utilities
○ Marketing and Advertising
○ Office Supplies
○ Insurance
● Cost of Goods Sold (COGS)
● Loan Repayments
● Capital Expenditures (e.g., equipment purchases)
● Taxes Paid
● Other Expenses
Total Cash Outflows
3. Net Cash Flow
Net Cash Flow=Total Cash Inflows−Total Cash Outflows\text{Net Cash Flow} = \
text{Total Cash Inflows} - \text{Total Cash Outflows}Net Cash Flow=Total Cash
Inflows−Total Cash Outflows
4. Opening Cash Balance
This is the cash the business has at the start of the period.
5. Closing Cash Balance
Closing Cash Balance=Opening Cash Balance+Net Cash Flow\text{Closing Cash Balance} = \
text{Opening Cash Balance} + \text{Net Cash Flow}Closing Cash Balance=Opening Cash
Balance+Net Cash Flow
Sample (Simplified for One Month)
Description Amount
(KES)
Opening Cash 100,000
Balance
Cash Inflows
Cash Sales 200,000
Accounts Receivable 50,000
Loan Received 150,000
Total Inflows 400,000
Cash Outflows
Salaries 120,000
Rent 30,000
Utilities 10,000
Inventory Purchase 70,000
Marketing 15,000
Loan Repayment 50,000
Total Outflows 295,000
Net Cash Flow 105,000
Closing Cash 205,000
Balance
A pro forma balance sheet is a forward-looking financial statement that outlines a company's
projected financial position at a specific future date. It is commonly used in business planning,
financial modeling, or when seeking investment or loans. The structure is similar to a regular
balance sheet, divided into three main sections: Assets, Liabilities, and Owner’s Equity. The
goal is to ensure that the accounting equation holds true:
Assets=Liabilities+Owner’s Equity\text{Assets} = \text{Liabilities} + \text{Owner’s
Equity}Assets=Liabilities+Owner’s Equity
Pro Forma Balance Sheet Template
Company Name: [Your Company Name]
As of Date: [Projected Date]
Currency: [e.g., USD, KES]
ASSETS
Current Assets:
● Cash and Cash Equivalents
● Accounts Receivable
● Inventory
● Prepaid Expenses
● Other Current Assets
Total Current Assets
Non-Current Assets:
● Property, Plant & Equipment (Net)
● Intangible Assets (e.g., patents, trademarks)
● Long-term Investments
● Other Non-Current Assets
Total Non-Current Assets
Total Assets = Current Assets + Non-Current Assets
LIABILITIES
Current Liabilities:
● Accounts Payable
● Accrued Expenses
● Short-term Loans
● Taxes Payable
● Other Current Liabilities
Total Current Liabilities
Non-Current Liabilities:
● Long-term Debt
● Deferred Tax Liabilities
● Other Non-Current Liabilities
Total Non-Current Liabilities
Total Liabilities = Current + Non-Current Liabilities
OWNER’S EQUITY
● Common Stock
● Retained Earnings
● Additional Paid-In Capital
● Net Income (Projected for the period)
● Less: Drawings or Dividends
Total Owner’s Equity
Total Liabilities and Equity=Total Assets\text{Total Liabilities and Equity} = \text{Total
Assets}Total Liabilities and Equity=Total Assets
Sample Pro Forma Balance Sheet (Simplified)
Assets Amount
(KES)
Current Assets
Cash 200,000
Accounts Receivable 100,000
Inventory 150,000
Total Current Assets 450,000
Non-Current Assets
Equipment (Net) 300,000
Intangible Assets 50,000
Total Non-Current 350,000
Assets
Total Assets 800,000
Liabilities & Equity Amount
(KES)
Current Liabilities
Accounts Payable 120,000
Short-term Loan 80,000
Total Current 200,000
Liabilities
Non-Current
Liabilities
Long-term Debt 150,000
Total Liabilities 350,000
Owner’s Equity
Common Stock 200,000
Retained Earnings 150,000
Net Income (Projected) 100,000
Total Equity 450,000
Total Liabilities + 800,000
Equity
Break-even cash flow refers to the minimum amount of cash inflow a business must generate
to cover all of its cash outflows (operating expenses, loan payments, capital expenditures, etc.)
during a given period—without making a profit or incurring a loss. It is especially important for
startups and businesses with high upfront costs, as it indicates the point where the business
becomes self-sustaining.
Understanding Break-Even Cash Flow
The break-even cash flow analysis answers this question:
How much cash do we need to bring in to keep the business running without losing
money?
Unlike traditional break-even analysis (which uses profits and includes non-cash items like
depreciation), break-even cash flow focuses strictly on actual cash moving in and out of the
business.
Formula:
Break-even cash flow=Total Cash Outflows\text{Break-even cash flow} = \text{Total Cash
Outflows}Break-even cash flow=Total Cash Outflows
Alternatively, for more detail:
Break-even Cash Flow=Fixed Operating Cash Costs+Debt Repayments+Capital
Expenditures+Taxes Paid+Variable Costs (per unit × units sold)\text{Break-even Cash Flow} = \
text{Fixed Operating Cash Costs} + \text{Debt Repayments} + \text{Capital Expenditures} + \
text{Taxes Paid} + \text{Variable Costs (per unit × units sold)}Break-even Cash Flow=Fixed
Operating Cash Costs+Debt Repayments+Capital Expenditures+Taxes Paid+Variable Costs
(per unit × units sold)
You want your cash inflows to be equal to this amount to break even.
Example (Monthly Projection)
Let’s say you’re running a small e-commerce business and you’ve projected the following cash
outflows for one month:
● Salaries and wages: KES 150,000
● Rent: KES 30,000
● Inventory purchases: KES 100,000
● Marketing: KES 20,000
● Loan repayment: KES 50,000
● Miscellaneous expenses: KES 10,000
Total Cash Outflows = KES 360,000
In this case, your break-even cash flow is KES 360,000, meaning you need to generate at
least that much in cash inflows (from sales or services) to cover all your monthly expenses and
avoid dipping into reserves or debt.