new business module

FINANCING A BUSINESS 107
Month
Total
1 2 3 4 5 6 7 8 9 10 11 12
Sales revenue
2,000 2,000 3,000 4,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 75,000
Operational expenses
Flour 25 25 50 100 200 200 200 200 200 200 200 200 1,800
Oil 100 100 200 300 600 600 600 600 600 600 600 600 5,500
Minced meat 150 150 300 550 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 9,150
Salt and spices 100 100 150 250 500 500 500 500 500 500 500 500 4,600
Packaging 1,000 1,000 1,000 1,000 4,000
Cleaning
materials
2,500 2,500 2,500 2,500 10,000
Transportation
costs
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Utilities 800 800 800 800 800 800 4,800
Total 5,675 1,375 2,500 5,700 4,100 3,300 7,600 3,300 4,100 6,800 4,100 3,300 49,600
Free cash flow
-3,675 625 500 -1,700 3,900 4,700 400 4,700 3,900 1,200 3,900 4,700 23,150
Cumulat. free cash flow
-3,675 -3,050 -2,550 -4,250 -350 4,350 4,750 9,450 13,350 14,550 18,450 23,150
Lara saw that for the first five months her business would not generate sufficient cash to support
itself. She saw that she needed at least $4,250 to bridge the gap.
Month
Total
1 2 3 4 5 6 7 8 9 10 11 12
Sales revenue
2,000 2,000 3,000 4,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 75,000
Operational expenses
Total 5,675 1,375 2,500 5,700 4,100 3,300 7,600 3,300 4,100 6,800 4,100 3,300 49,600
Working capital
Total 4,250 0 0 0 0 0 0 0 0 0 0 0 4,250
Free cash flow
575 625 500 -1,700 3,900 4,700 400 4,700 3,900 1,200 3,900 4,700 27,400
Cumulat. free cash flow
575 1,200 1,700 0 3,900 8,600 9,000 13,700 17,600 18,800 22,700 27,400
Lara knew she would have to wait four months before she could take any money out of the
business for her personal use, yet she had calculated that her personal savings were sufficient
to cover her personal expenses during the next seven months.