Leslie and Ben want to find out how much operating capital they will need to borrow this year. Ben developed the top part of the budget, you will need to fill in all the yellow-shaded blanks to complete the rest.

Budget for an ending cash balance of $1,000 each quarter.

Calculate how much they will need to borrow in an operating loan each quarter and how much they can repay.

Only start payments on the operating loan in the fourth quarter when net cash flow is positive.

Dont consider interest on the operating loan for this exercise.

Then complete the last column to estimate the yearly overall cash flow picture.

CASH FLOW BUDGET 5 marks total for cash flow