To estimate your cash flow, focus on your company’s short-term (“current”) assets and liabilities, including the current portion of long-term loans. The balance sheet shows you your company’s assets, liabilities and net worth at any given point in time, and connects your income statement to your cash flow statement. Most smaller businesses, however, rely on their income statement and balance sheet. If your business growth rate is relatively stable, you can use your cash flow statement to estimate your cash needs. To estimate your cash flow … take your current assets and subtract your current liabilities and you get your working capital. If you’ve been in business for a year already, you can use your existing cash flow history as a guide, as well as quotes you’ve received, and increase the estimated costs in areas where you need to see growth. If you’re a brand-new business owner, do your own research and seek outside guidance to estimate these costs as accurately as possible.
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