Unformatted text preview: ) Income,”gives you a place to show money received from
special operations, such as interest income in a company whose main business isn’t making
interest. A lot of businesses won’t use this one. 4. The next row shows money received from charging customers sales-related and value-added
(VAT) taxes that really belong to the government, and must be paid later. These taxes aren’t
normally part of a sales forecast, so they don’t affect the Income statement, but they do affect
cash ﬂow. 5. The next three rows are where you estimate amounts of money coming into the company as
new borrowed money. The difference between each of the three is a matter of type of borrowing
• The row named “New Current Borrowing” (also called short-term debt) is for money you
get by borrowing through normal lending institutions, as standard loans, with interest
payments. • The row named “New Other Liabilities” is for items like accrued taxes and accrued
salaries and wages, money owed that will have to be paid, but isn’t formally borrowed.
Normally there are no interest expenses associated with this row. CHAPTER 16: CASH IS KING • 16.5 The row named “New Long-term Liabilities” is for new money borrowed on longer
terms. This type of borrowing usually requires interest payments. 6. The sixth and seventh additional cash rows are “Sales of Other Current Assets” and “Sales of
Long-term Assets.” Selling short-term or long-term assets is another possible way to generate
cash. 7. The last row in cash received, “New Investment Received,” is for new money coming into the
company as investment. The result of this section is the sum of cash received. These are amounts received from normal
operations (cash sales and cash from receivables), and additional amounts from assumptions outside
the normal operations. Now let’s look at spending, the other side of the cash equation. Estimating Expenditures
SAMPLE CASE CASH SPENT The cash plan has to deal with the real ﬂow of money spent. (Amounts shown in thousands.
Numbers may be aff...
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