What is the difference between cash flow and profit?

Profit (or Net Income) is your total revenue minus all expenses, including non-cash items like depreciation, as shown on an income statement. Cash Flow is the actual movement of money in and out of your business. A business can be profitable but have negative cash flow if, for example, clients are slow to pay their invoices (high accounts receivable).

Why is cash flow projection important for a small business?

Cash flow projection is vital because it helps you anticipate future cash shortages or surpluses. It allows you to make informed decisions about hiring, purchasing inventory, managing debt, and planning for growth. It is the key to maintaining business liquidity and avoiding insolvency.

What if my income or expenses are not the same every month?

This calculator uses average monthly figures for simplicity. For a more detailed forecast with variable (seasonal) income and expenses, you would typically use a spreadsheet. This tool is best for getting a quick, high-level projection based on your typical month.

Are non-cash expenses like depreciation included?

No. This is a *cash flow* calculator, not a profit calculator. Non-cash expenses like depreciation and amortization are accounting entries that do not affect your bank balance. Therefore, they are excluded from this calculation.

How can I improve my business's cash flow?

To improve cash flow, you can: 1. Increase inflows by invoicing promptly and chasing late payments. 2. Decrease outflows by negotiating better terms with suppliers or cutting non-essential costs. 3. Manage financing by securing a line of credit *before* you need it.

Cash Flow Projection Calculator

Audit: Complete

Formula (LaTeX) + variables + units

This section shows the formulas used by the calculator engine, plus variable definitions and units.

Formula (extracted LaTeX)

\[N = I_{total} - O_{total}\]

N = I_{total} - O_{total}

Formula (extracted LaTeX)

\[E_n = B_n + N\]

E_n = B_n + N

Formula (extracted LaTeX)

\[B_{n+1} = E_n\]

B_{n+1} = E_n

Formula (extracted text)

$ N = I_{total} - O_{total} $

Variables and units

P = principal (loan amount) (currency)
r = periodic interest rate (annual rate ÷ payments per year) (1)
n = total number of payments (years × payments per year) (count)
M = periodic payment for principal + interest (currency)
T = property tax (annual or monthly depending on input) (currency)

Sources (authoritative):

Home — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/
Finance — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/finance
Business Small Biz — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/subcategories/business-small-biz
FASB website — fasb.org · Accessed 2026-01-19
https://www.fasb.org/
Business Loan Calculator — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/business-loan
Startup Costs Calculator — calcdomain.com · Accessed 2026-01-19
https://calcdomain.com/startup-costs

Changelog

Version: 0.1.0-draft
Last code update: 2026-01-19

0.1.0-draft · 2026-01-19

Initial audit spec draft generated from HTML extraction (review required).
Verify formulas match the calculator engine and convert any text-only formulas to LaTeX.
Confirm sources are authoritative and relevant to the calculator methodology.

Verified by Ugo Candido on 2026-01-19
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