Learn how to prepare your own personal cash-flow statement.

Learning Objective

Wendy owns a music shop. This morning she realized that all the Maroon 5 CDs were sold out. She wants to know if she has enough cash to buy more Maroon 5 CDs.

Her supplier will only deliver the new CDs when he receives the payment by cash. Wendy needs the CDs urgently because Julia Gillard just rang her shop and said that all the asylum seekers need Maroon 5 CDs or else the human rights activists will cause Julia lots of trouble.

Cash outflow

Wendy has lots of other bills that need to be paid today:

• Cash wages for a causal staff from Taminmin College [$500]

• Cash payment for supplies of Lady Gaga CDs [$2000].

What should Wendy do?

Cash inflowShe received some cash sales from selling Rihanna and Coldplay CDs ($3000).

Wendy has some cash at hand ($1000)

Activity : Work in pairs to brainstorm how much (amount $$) Maroon 5 CDs Wendy can purchase today.

Wendy could only afford $1500 of Maroon 5 CDs.

Opening cash balance + Cash inflows – Cash outflows = Closing cash balance

Wendy’s Music Shop

Cash-flow Statement for the period ending 30 June 2011

Opening cash balance $1000

Add Cash coming in:

Cash sales (Rihanna and Coldplay CDs) +$3000

Less Cash going out:

Cash wages for causal staff -$500

Cash payment for supplies of Lady Gaga CDs -$2000

Closing cash balance $1500

Wendy’s music business has grown bigger. She is employing all the students in this class to help as causal staff for a week (except Sunday). She will be paying each student $100 a day. Prepare your personal daily cash-flow statement.

Assessment

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Opening cash

balance: $20.00 $110.00 $200.00 $283.00 $366.00 $449.00 $409.00

Cash coming in:

Cash wages $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $0.00

Cash going out:

Lunch -$10.00 -$10.00 -$10.00 -$10.00 -$10.00 -$10.00 -$10.00

Hire videos $0.00 $0.00 -$7.00 -$7.00 -$7.00 $0.00 -$7.00

Shopping for clothes $0.00 $0.00 $0.00 $0.00 $0.00 -$100.00 $0.00

Bought a CD $0.00 $0.00 $0.00 $0.00 $0.00 -$30.00 $0.00

Closing cash

balance:$110.00 $200.00 $283.00 $366.00 $449.00 $409.00 $392.00