Cashflow Forecaster

What this cashflow forecaster does

This tool projects your cash position over 12 months, month by month, from a starting cash balance, current monthly revenue, growth rate, gross margin, fixed costs, variable costs, and tax rate. It is a planning model — not a forecast, not a guarantee, and not accounting advice.

Cashflow is not the same as profit. A profitable business can run out of cash if payments arrive late or if it invests in inventory faster than it collects revenue. A business with thin profit can survive on cash. This tool is about cash, not profit.

How the model works

• Revenue grows monthly by your stated growth rate, compounding.
• Gross profit = revenue × gross margin. This is what's left after direct cost of goods.
• Variable costs = revenue × variable percentage. Ads, transaction fees, packaging.
• Fixed costs = constant each month.
• Operating profit = gross profit − variable costs − fixed costs.
• Tax applied only if operating profit is positive.
• Net profit = operating profit − tax.
• Ending cash = starting cash + cumulative net profit.

How to read the output

• Break-even month — the first month where monthly net profit is positive.
• Cash low point — the lowest cash balance across the 12 months. If this goes negative, you need outside cash or a slower ramp.
• Runway — how many months your cash lasts if revenue collapses to zero. A planning guide only.
• 12-month total profit — sum of net profit across the year.

Worked example

Starting cash $5,000, monthly revenue $2,000, growth 8%, gross margin 60%, fixed costs $800, variable costs 10%, tax 15%.

• Month 1: Revenue $2,000 → GP $1,200 → variable $200 → profit before tax $200 → tax $30 → net $170 → cash $5,170
• Month 2: Revenue $2,160 → GP $1,296 → variable $216 → profit before tax $280 → tax $42 → net $238 → cash $5,408
• Month 6: Revenue ~$2,939 → GP ~$1,763 → variable ~$294 → profit before tax ~$669 → tax ~$100 → net ~$569 → cash ~$7,400
• Month 12: Revenue ~$4,666 → net ~$1,300 → cash ~$14,000+

This model shows a slow burn that pays off. A slower growth rate (3%) or higher fixed cost would show a thinner result. Try changing inputs one at a time to see which assumption the model is most sensitive to.

Common mistakes in cashflow planning

• Assuming revenue arrives when earned. If customers pay in 30 or 60 days, cash arrives after revenue. This model does not simulate payment delays.
• Forgetting taxes. Income tax, VAT, GST, sales tax all reduce cash. This model uses a simplified rate.
• Assuming growth compounds forever. Real growth is bumpy. Every spike is followed by a plateau.
• Ignoring one-time costs. Equipment, legal, deposits, bulk inventory. These don't fit the monthly model.
• Confusing profit with cash. If the plan shows profit but cash is tight, you have a cashflow problem, not a profit problem.

When this model is wrong

• Seasonal businesses — revenue varies by month; use a custom seasonal model instead.
• Pre-revenue startups — the model assumes revenue starts now; use a burn-rate-only model until launch.
• Inventory-heavy businesses — cash is spent on inventory before revenue arrives; this model doesn't capture the lag.
• Subscription businesses — MRR has different retention dynamics; the model treats revenue as earned monthly which is roughly right, but churn isn't modeled.

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