CASHFLOW FORECASTING

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CASHFLOW FORECASTING
Lincoln Allen, Cashflow Controller 11 June 2008
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Overview

• Cash balances long term debt
• What is cashflow forecasting?
• Reporting and models
• What gives me a headache
• How you can help.

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Investing cash

• How much?
• 51m
• For how long?
• instant to 6 months
• In what?
• SIBA
• Term deposits
• Via cash managers
• Money market funds.

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Long term debt

• Debt refinancing (165m)
• To fund infrastructure programme
• Liquidity days
• 50 days is trigger line
• 40 days is rock bottom.

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What is cashflow forecasting?

• A cashflow forecast is, err, self-defining,
• a cashflow forecast!
• Includes all cashflows
• Operating activities
• Finance activities
• Capital program
• For 5 years by month/quarter
• AND
• For next 90 days by day

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Advantages of cashflow forecasts

• Cash is quing
• Easy to understand
• Shows impact of change
• Identifies financial issues
• Model/scenarios
• Scope corrective action
• A financial tool in the FDs kitbag.

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Financial disciplines

• Liquidity days
• Rigorously control debt
• Dont run out of cash.

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Cashflow reporting

• Monthly reporting to FD
• By month/quarter to 2013
• By day for next 90 days
• Liquidity days
• How good are the forecasts?.

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Models

• Long term (5 years)
• Short term (3 months)
• Integrated reporting
• Health check.

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Headaches
Challenges

• Garbage in garbage out
• Annual data v monthly forecasts
• Timeliness of information
• Integrating into existing processes
• Profile
• Analysis of actuals
• Limited non-involvement.

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What you can do

• Cash culture awareness
• Keep me in the loop
• Tell me about anything gt25,000
• Ring me
• Email me
• Use form on the net
• Stop me in the corridor
• Tell me about changes to plans
• Tell others.

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EXPERIENCE THE RAW GUT-WRENCHING DRAMA OF HUMAN
CONFLICT THROUGH CASHFLOW FORECASTING
PREPARING TO DO BATTLE
THE THRILL OF VICTORY
THE AGONY OF DEFEAT
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Contact details
Lincoln Allen Cashflow Controller Finance
Services Tel 3827 Email L.Allen_at_exeter.ac.uk