FINANCIAL MODELS FOR THE DECISIONS AHEAD

Change an assumption.
See the consequence.

Explore a simple cash scenario and the questions it leaves open. A useful model makes its assumptions visible.

Defined scope. Documented assumptions. A model you can understand and use.

ACA

Kishen Patel, BFP ACAICAEW Chartered Accountant

What this demonstration does.

The example forecasts 12 monthly cash balances from opening cash, month-one receipts, a constant monthly receipts-growth rate, base monthly payments and an additional monthly cost starting in month four. Receipts are assumed to be collected in the month shown.

What the demonstration leaves out.

It is not a full financial model or a business-specific forecast. It excludes separate collection delays, tax, capital expenditure, financing, seasonal payments, price changes and working-capital schedules. Figures are rounded for display; calculations use unrounded balances.

From an example to your own model.

A bespoke project starts with your actual opening position, operating drivers and intended use. The assumptions, level of detail, supporting schedules and review process are agreed to suit that question. You can enquire without submitting the calculator inputs.

A WORKED EXAMPLE. NOT YOUR FORECAST.

What if you hire?
Or growth slows?

Change the assumptions to see 12 months of illustrative cash movement. The tool runs in your browser.

Opening cash (£)Month-one cash receipts (£)Monthly receipts growth (%)Base monthly payments (£)Extra monthly cost from month four (£)

ILLUSTRATIVE CASH POSITION

Closing cash / month 12£110,761

Lowest month-end cash£108,916

No negative month-end balance within this 12-month illustration.

All receipts are collected in the month shown. Base payments remain constant; extra cost starts in month four. Excludes separate tax, investment and financing schedules.

View the monthly workings

Illustrative cash movements, rounded to pounds
Month	Opening cash	Receipts	Payments	Closing cash

Enable JavaScript to explore the scenario. The example assumes £150,000 opening cash, £30,000 initial monthly receipts growing by 3% monthly, £35,000 monthly base payments and an extra £5,000 monthly cost from month four.

A monthly balance may hide a shortfall within the month. Negative balances indicate an unfunded gap in this simplified scenario, not an available overdraft.

BEFORE WE BUILD

Your modelling
questions.
Answered.

Are my calculator inputs submitted?+

No. The calculator runs in your browser and its inputs are not included in an enquiry.

Does positive closing cash mean there are no cash risks?+

No. Monthly figures can conceal shortfalls within a month, and the example excludes several real-world cash movements. Use a forecast with appropriate timing and scope for actual decisions.

MAKE YOUR NEXT DECISION A CLEARER ONE

Need a financial model?
Let’s connect the numbers.

Discuss my model ↗

A clear brief. An agreed scope. A useful next step.

CONSULT EFC · PRACTICAL GUIDES

Go deeper before your next decision.

The assumptions register behind a useful financial model

Make a financial model easier to challenge and maintain: document input sources, owners, confidence, scenarios and the decisions each assumption supports.

Read the guide ↗

Why a growth financial model can show a cash shortfall

Explore the gap between profit and funding needs through debtor days, stock, supplier terms, hiring and investment in an integrated financial model.