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Cash Management Modeling

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Cash Management Modeling, Excel Assignment 3

Cash Management Modeling, Excel Assignment 3
Cash flow forecasts are a powerful management tool to help identify future deficits or surpluses in liquidity. The cash flow forecast shows the total expected outflows and inflows during a given period; i.e. a year. It is vitally important that this budget is prepared so the organization is aware of shortages and surpluses during the year. These can help the business spot cash problems and cash opportunities. A known cash shortage can be planned for and resolved proactively verses reactively. It would be wrong to assume that if the organization is in surplus that it does not have a problem. Idle cash means the opportunity to earn interest or profitable investment is lost (Investopedia, 2012).
Lakewood Laser Skincare
For Lakewood Laser Skincare and all business cash budgets really do matter. The business owner who does not pay attention might have a rude surprise when they run out of cash or applies to the bank for renewal of loans. One of the many advantages of utilizing Excel financials or an accounting software program is that updating is calculated automatically by simply completing a new data input. This helps business owners quickly get a handle on the financial strength and capabilities of their business.
Creating and Calculating Cash Balances Sheets
The first step in creating a multiproduct, multi-period, spreadsheet-based budget is setting up a clear and understandable Data Input Sheet. This sheet will summarize the assumptions and estimates for the entire budget for business like Lakewood Laser Skincare. By putting them in one place, you make it easy for those less familiar with spreadsheets to get into the budget and change their assumptions. It also makes it easy to adjust the budget based on management discussions, to create best- and worst-case scenarios,...

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