How Do You Prepare A Cash Flow Analysis?
Preparing a cash flow analysis helps track your transactions. An integral part of business accounting, it will help you realize how much money you actually have to work with, how much you can reinvest and how much you can withdraw for personal expenses. One of the first financial forms you will encounter, the cash flow anyalysis should be prepared often. Step 1 Estimate your annual gross income as the first step in preparing a cash flow analysis. Allow for subtractions if your business is not operating at full potential. For instance, if you own an apartment complex, you add the amount of rent for each month, but subtract an estimated amount for unforeseen vacancies. The longer you are in business, the easier it will be to predict operating losses. Step 2 Add any other income you receive and you will arrive at your “effective gross income.” This is a reliable business accounting figure that represents your entire annual projected gross income. Write this number down for future figuring
