Cash Flow Calculator
- Suppliers and stock
- Payroll
- Rent and utilities
- Other operating costs
- Loan payments
- Owner draws and equipment
- Left over
The business adds $4,000.00 of cash this month.
How the cash flow calculation works
Count cash when it moves, not when it's billed
Use customer payments you've received. Invoices you've sent don't count yet. A sale on Net 30 terms shows up next month.
Add every payment that leaves the account
Suppliers, payroll, rent, loan payments and owner draws all reduce cash, even though loan principal and draws aren't expenses on the profit and loss.
Net cash flow = cash in − cash out
$62,000 in minus $58,000 out is a positive $4,000 for the month.
Ending cash = starting cash + net cash flow
$20,000 + $4,000 = $24,000 to start next month. If net flow is negative, divide ending cash by the monthly net loss to see how many months it lasts: $4,000 ÷ $16,000 = 0.25 months, about a week.
Worked example. Starting with $20,000, a business receives $62,000 and pays out $58,000 in a month. Net cash flow is +$4,000 and ending cash is $24,000. If customer payments fell to $40,000, the month would lose $16,000 and leave $4,000, about a week's runway.
Cash Flow FAQ
How do you calculate cash flow for a small business?
Add all cash received in the period, subtract all cash paid out, and the result is net cash flow. Add it to starting cash to get ending cash.
What is the difference between cash flow and profit?
Profit counts sales and expenses when they're earned or incurred; cash flow counts money when it moves. A profitable business can run out of cash if customers pay slowly.
What is the net cash flow formula?
Net cash flow = total cash received − total cash paid out in the same period. In the example, $62,000 − $58,000 = +$4,000. A negative result means the business spent more cash than it took in.
What is a good cash flow for a small business?
There's no single official number. Positive net cash flow most months is the basic goal, and enough cash on hand to cover the negative months. Seasonal businesses plan for slow months in advance, and lenders may set their own cash or coverage minimums in a loan agreement.
What is the operating cash flow formula?
Operating cash flow (indirect method) = net income + non-cash expenses such as depreciation − increases in receivables and inventory + increases in accounts payable and other short-term bills owed. Example: $10,000 net income + $2,000 depreciation − $3,000 more owed by customers = $9,000 operating cash flow.
What is the free cash flow formula?
Free cash flow = operating cash flow − capital expenditures (equipment, vehicles, buildings). Using the example above, $9,000 operating cash flow − $4,000 of equipment purchases = $5,000 free cash flow.
Can I use this as a rental property cash flow calculator?
Yes: enter rent received as cash in, and mortgage, taxes, insurance, repairs and management as cash out. The net is the property's monthly cash flow. For vacancy, cap rate and cash-on-cash return, use the rental property cash flow calculator.
Is this a discounted cash flow calculator?
No, it totals one month's actual cash. To value future cash flows in today's dollars, use the NPV calculator.