Cash Flow Calculator
Track your business cash flow. Enter monthly inflows and outflows to see your net cash position.
$15,000 of monthly revenue against $12,000 of expenses leaves $3,000 of net cash flow — a 20% margin — which grows a $10,000 opening balance to $46,000 over twelve months.
Calculator
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What Is Cash Flow?
Cash flow is the net amount of cash moving in and out of your business:
Net Cash Flow = Cash Inflows - Cash Outflows
Positive cash flow means more money coming in than going out. Negative cash flow is a warning sign.
Worked example
Using the defaults — $15,000 monthly revenue, $12,000 monthly expenses, and a $10,000 starting balance:
Find the net. $15,000 − $12,000 = $3,000 a month. Positive, which means the business funds itself and accumulates cash.
Express it as a margin. $3,000 ÷ $15,000 = 20%. Twenty cents of every revenue dollar is retained as cash. For most small businesses a 10% to 20% net cash margin is a reasonable working target.
Project the balance forward. $10,000 + (12 × $3,000) = $46,000 at the end of twelve months. This is the number to hold against your obligations: the next tax payment, equipment replacement, a seasonal inventory build.
Now stress it. If revenue fell 20% to $12,000 while expenses held, net cash flow would be zero. The business would stop accumulating cash entirely. A 25% revenue fall puts it at −$1,000 a month, which burns the $10,000 reserve in ten months. That is the margin of safety this figure measures.
Enter 15000, 12000 and 10000 above to reproduce the $3,000 and 20% figures. The model treats every month as identical; a real business has seasonal peaks and troughs, and the reserve has to cover the trough.
What happens as the margin compresses
The same $15,000 of revenue with rising expenses. The margin falls faster than the absolute cash figure, and the reserve runway collapses.
| Monthly expenses | Net cash flow | Margin | Ending balance (12 mo) | Months of runway if net goes negative |
|---|---|---|---|---|
| $10,500 | $4,500 | 30.0% | $64,000 | — |
| $12,000 (default) | $3,000 | 20.0% | $46,000 | — |
| $13,500 | $1,500 | 10.0% | $28,000 | 6.7 mo at −$1,500 |
| $15,000 | $0 | 0.0% | $10,000 | — (breakeven) |
| $16,000 | −$1,000 | −6.7% | −$2,000 | 10.0 mo |
At zero net cash flow the business survives but cannot fund growth, tax bills or equipment replacement from operations. Below zero, the $10,000 reserve buys ten months at a $1,000 monthly burn. Runway is reserve divided by monthly burn.
Common mistakes with this calculation
- Equating profit with cash flow. A profitable business can run out of cash. A large sale on 60-day terms is profit on the income statement and nothing in the bank. Meanwhile payroll, rent and supplier invoices are due now. Track the timing of cash, not only the accrual accounting.
- Ignoring the tax and one-off items. Quarterly estimated taxes, annual insurance premiums, equipment purchases and loan repayments all land as spikes rather than smooth monthly costs. Averages hide them, and they are the usual cause of a surprise cash crunch in an otherwise healthy month.
- Assuming the opening balance is available. Not all of your bank balance is working capital. Security deposits, customer prepayments, and the money set aside for payroll tax are not yours to spend. Deduct restricted cash before treating a balance as a reserve.
- Not modelling the trough. An annual average margin says nothing about February, when revenue may be half of the peak. Build the model at the worst month of the cycle and confirm the reserve covers it, then check the average.
When this calculator does not apply
- It uses a single inflow and outflow figure. Real cash flow needs at least a monthly schedule with the timing of receipts and payments.
- It ignores the delay between invoicing and collection, which is the single largest cause of small-business cash failure.
- It treats all months as identical. Seasonal businesses need the full twelve-month profile.
- It excludes tax, loan principal repayments and capital expenditure, all of which consume cash without appearing in operating costs.
- It assumes the opening balance is unrestricted and available.
Frequently Asked Questions
What is a healthy cash flow?
A business should aim for positive cash flow with enough cushion to cover 3-6 months of expenses. The exact target depends on your industry and growth stage.
What if my cash flow is negative?
Negative cash flow for a short period can be normal (e.g., during growth investments), but persistent negative cash flow will eventually deplete your reserves and require financing or cost cuts.
Sources & Methodology
This calculator uses standard financial formulas. See our methodology page for the full formula derivation.
- Small Business Financial Management US Small Business Administration
- Business Planning and Financial Projections US Small Business Administration
- Financial Statements and Analysis US Securities and Exchange Commission
- Financial Accounts of the United States Federal Reserve
- Small Business Facts SBA Office of Advocacy
Last reviewed .
Key takeaways
- $15,000 in against $12,000 out is $3,000 of net cash flow, a 20% margin.
- Twelve months at that rate grows a $10,000 reserve to $46,000.
- A 20% revenue fall with fixed expenses takes net cash flow to exactly zero.
- Profit is not cash. A big invoice on 60-day terms adds nothing to the bank today.
- Model the worst month of the cycle, then confirm the reserve covers it.