CF: CASH FLOW ANALYSIS
DATA ENTRY:
DIFFERENCE BETWEEN THE EFFECT OF ENTERING NUMBERS AND FORMULAS
There are basically three methods of entering data into CF:

Entering a Number,

Itemization, and

Entering a Formula.
Entering a Number.
When you enter a number (amount) into a CF data screen, that number only
pertains to the particular month in the particular year where it is entered.
Using Itemization.
Using itemization simply allows you to calculate a number (on a separate
itemization screen), and the figure which appears on the data entry screen
(as a result of your itemization) only pertains to that particular month
in the year where it is entered.
Entering a Formula.

Do Not Use Formula for Remaining Months

If you enter a formula in CF, but you indicate that you do not want to
use that formula for the remaining months, then the calculated number (as
a result of the formula) only pertains to that particular month in the
particular year where it is entered.

Use Formula for Remaining Months

If you enter a formula in CF, and you indicate that you do want to use
that formula for the remaining months, then the formula will "carry down"
for each month throughout the following years until it is replaced by
another formula. Since, you are usually preparing your CF model so as to
make a projection over a number of years (and as it would be very cumbersome
to enter each "number" over 60 months), using formulas will help you to
make sure numbers which should apply for the entire 5year plan are properly
entered, without having to do so manually.
Incrementing by Zero:

A very useful method of carrying down a number in the amount column is
to use this formula in the month after the amount you wish to carry down
appears and indicating an increment of zero. This is useful because not
only does it save you the trouble of entering the same number repeatedly,
but if after you have entered the formula, you then change an amount for
a certain month, the following months will also reflect the change in amount.

The business is going to be paying rent in the amount of $1,500. This amount
will be the same every month, so we carry it down using the zero increment
formula. However, after six months the rent is increased by 100. In the
sixth month we change the amount to reflect the increased rent of $1,600;
and upon entering this amount the subsequent months will now reflect the
increased rent.
Multiplying by 100:

Again, you can do a "no change" carry down of your amount by using 100
as your multiplier and the effect is the same as using the zero increment
formula described above.
The Difference Between Projections and Forecasts.
In utilizing CF, you must consider the two fundamental alternatives available
in the creation of your cash flow model.

A FINANCIAL FORECAST is management's expectation of the future operation
of the business based upon assumptions that are expected to occur.

A FINANCIAL PROJECTION is management's expectation of the future
operation of the business based upon "what if" situations. Therefore, in
any projection at least one assumption is not necessarily expected to occur
and, in fact, may be improbable.
In doing a budget that is in the nature of a forecast, the assumptions
are "expected" to occur; on the other hand projecting growth is in the
nature of a projection since the anticipated amount of growth is speculated
and the anticipated amount of costs associated with the growth are projected
upon the assumption of a particular cost or relationship with sales that
may or may not be true. you do want to use that formula for the remaining
months, then the formula will "carry down" for each month throughout the
following years until it is replaced by another formula. Since, you are
usually preparing your CF model so as to make a projection over a number
of years (and as it would be very cumbersome to enter each "number" over
60 months), using formulas will help you to make sure numbers which should
apply for the entire 5year plan are properly entered, without having to
do so manually.
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