Cash Projection Model

A cash projection model is a financial forecasting tool that estimates future cash inflows and outflows over a defined period — usually 6-12 months. It helps businesses anticipate cash shortfalls or surpluses and make informed operational and investment decisions.

Components:

• Projected sales and collections.

• Operating expenses.

• Loan repayments and interest.

• Tax obligations.

• Capital expenditures.

Uses:

• Scenario planning and stress testing.

• Fundraising strategy preparation.

• Operational budget adjustments.

Well-structured cash projection models often use spreadsheets or financial planning software, with multiple scenarios built in to reflect optimistic, pessimistic, and baseline forecasts.