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A quick explanation and example of Cashflow (video)

I am not an accountant but I do my own accounts. I also work with clients on financial projections. Finance is at the core of business and marketing. Cashflow is the core of finances. This is a short blogpost to explain Cashflow to business novices using a somewhat realistic scenario. The details are outlined in text and the answer – I should say my thoughts – are in the video.

Cashflow Scenario

The following details are entirely fictitious and any resemblance to any trading business is entirely unintended:

1. Jelly Jumble Ltd owned by Myles Calisto is a pop up sweet shop.

2. Stock is €1 per unit if 1000 units are purchased in a transaction.

3. Myles knows that he will generally sell 250 units per month.

4. He receives a very attractive offer from his supplier:
If he buys 5000 units in the next order, the business can avail of a reduced price of €0.8 per unit. This is a 20% discount.

5. Each unit sells for €2.

6. The other piece of information is that customers either pay Cash (50% of revenue) or pay on invoice within a month (remaining 50% of turnover).


The question is whether Myles should take up this offer? In the video below, I present some introductory financial analysis to assist with making this decision.



While this scenario may seem simplistic, I hope you find this video of use. When creating financial projections for client businesses experiencing Growth, I use a sophisticated Excel based template. However, the concepts presented in the video and the approach remain relevant. I look forward to your comments!


donncha (@donnchadhh)


p.s the video towards the end references the issue of getting paid on time as a challenge for small business. For further reading on ‘good cash flow management’, I recommend SAGE’s free 9 page pdf ‘Advice to manage your finances and cash flow‘ which can be downloaded from their site. Please note that I have no business relationship with SAGE and this is not an endorsement of their service!

One Response so far.

  1. […] plan in the appendices – I recommend the following financial schedules be added: monthly Cashflow for 3 years, annual P&L and Balance Sheets (Statement of Affairs) for 3 years. These will be […]

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