Transcript Using Cash Flow Budgets to Improve Cash Flow and
Using Cash Flow Budgets to Improve Cash Flow and Liquidity in the Catfish Business
Carole R. Engle Aquaculture/Fisheries Center U. of Arkansas at Pine Bluff
Monthly Cash Flow Budget Item Beginning Cash
Receipts from catfish sold
Cash Inflow Operating Cash Expenses
Fingerlings Feed Gas, Fuel, and Oil Chemicals Labor Harvesting & Hauling Machine Hire Office Expenses Rent Repairs and Maintenance Utilities Other Operating Costs Total Operating Expenses
Fixed Cash Expenses
Taxes and Insurance Total Fixed cash Expenses
Living Expenses Other Expenses Scheduled Debt Paym ents
Real Estate Principal Interest (10% APR) Equipment Principal Interest (10% APR) Operating Principal Interest (10% APR)
Total Cash Outflow Cash Available New Borrow ing Cash Balance Engle, UAPB Jan
15,849.00
15,849.00
Feb
39.79
60,000.00
60,039.79
Mar
42,835.71
42,835.71
Apr
12,065.73
60,000.00
72,065.73
May
46,466.02
Jun
24,256.90
46,466.02
24,256.90
Jul
1,145.96
60,000.00
61,145.96
Aug
34,568.03
34,568.03
Sep
5,806.26
60,000.00
65,806.26
Oct
36,263.66
36,263.66
3,830.00
380.00
1,000.00
717.39
10.00
360.00
1,310.00
190.00
360.00
8,157.39
4,790.00
470.00
1,000.00
722.79
10.00
360.00
1,310.00
390.00
360.00
9,412.79
12,415.00
5,750.00
570.00
470.00
1,730.00
806.91
10.00
360.00
1,310.00
970.00
360.00
24,751.91
6,710.00
660.00
1,730.00
692.32
10.00
360.00
1,310.00
1,360.00
360.00
13,192.32
7,670.00
750.00
1,730.00
687.24
10.00
360.00
1,310.00
1,560.00
360.00
14,437.24
8,620.00
850.00
470.00
1,950.00
681.21
150.00
10.00
360.00
1,310.00
2,340.00
360.00
17,101.21
10,540.00
1,040.00
1,950.00
695.49
150.00
10.00
360.00
1,310.00
2,530.00
360.00
18,945.49
11,500.00
1,130.00
620.00
1,950.00
754.85
290.00
10.00
360.00
1,310.00
2,730.00
360.00
21,014.85
14,370.00
1,410.00
1,950.00
701.20
150.00
10.00
360.00
1,310.00
2,920.00
360.00
23,541.20
9,580.00
940.00
1,730.00
729.46
10.00
360.00
1,310.00
2,340.00
360.00
17,359.46
3,000.00
3,000.00
3,000.00
4,760.00
4,760.00
3,000.00
3,000.00
3,000.00
3,000.00
3,000.00
3,000.00
3,000.00
265.00
2,368.75
2,018.07
15,809.21
39.79
39.79
665.00
2,108.23
2,018.07
17,204.08
42,835.71
42,835.71
1,000.00
2,018.07
30,769.98
12,065.73
12,065.73
265.00
2,364.33
2,018.07
25,599.72
46,466.02
46,466.02
665.00
2,097.14
2,009.73
22,209.11
24,256.90
24,256.90
1,000.00
2,009.73
23,110.94
1,145.96
1,145.96
265.00
2,357.71
2,009.73
26,577.93
34,568.03
34,568.03
665.00
2,080.52
2,001.40
28,761.77
5,806.26
5,806.26
1,000.00
2,001.40
29,542.60
36,263.66
36,263.66
265.00
2,351.08
2,001.40
24,976.94
11,286.72
11,286.72
Cash Flow Scenarios Sept. Farm A $60,000 Oct. Nov. $90,000 $60,000 Dec. $60,000 Feb. Farm B $60,000 April July $60,000 $60,000 Sept. Nov. $60,000 $30,000 Engle, UAPB
Liquidity Measures for Two Scenarios Indicator Cash Flow Coverage Debt-Servicing A (0.26) 0.21 Cash avail./cash inflow Cash avail./op. expenses Cash avail./liabilities Engle, UAPB (0.02) (0.03) (0.01) B 0.17 0.17 0.01 0.02 0.01
Adequate Cash Flow:
Determined from Cash Flow Budget • • • • Cash flow budget must show realistic projections of cash revenue for the year, by month.
Any month with a negative cash flow is a cash flow problem that needs to be resolved.
Must identify a production/financial plan that generates the revenue when needed.
If there is a problem, may need to sell off some stock, reduce densities, allow for better growth = better cash flow.
Engle, UAPB
• Decisions on stocking and feeding rates should be based on meeting short-term financial obligations.
Engle, UAPB
What should I look at this winter?
• • •
Do detailed cash flow budget and know when you need to make payments.
Using Fishy, project different harvest dates at different stocking & feeding rates.
Choose feeding and stocking rates that allow farmer to make necessary payments.
Engle, UAPB
Larger fish at stocking reach harvest in shorter time period.
May June July August Sept.
Oct.
Engle, UAPB
Fish grow faster at lower densities.
Engle, UAPB
Cash Flow Simulator:
Files available in training materials on web site.
Engle, UAPB